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Key Terms, Learning Outcomes and Quiz Questions for Chapters 1-5 from BMGT 103.
What is the difference between For Profit and Non Profit?
A for profit business generates revenue that goes back into the owners, while a non profit does not.
Name each of the four factors of production.
Natural Resources, Labor, Capital, and Entrepreneurship.
What are the six external forces?
Economic environment, Legal environment, Competitive environment, Tech environment, social environment, and global environment
What is the difference between the accounting function and the finance function in a business?
Accounting makes decisions about the movement of the money and Finance is how to obtain the money.
What is the difference between macro and micro economics?
Macro studies economics as a whole, micro is personal.
What are economies of scale?
The advantages that can occur as a result of increasing the size of a business.
What is the Law of Demand?
The more a good is bought, the lower the price is, and the less it is bought the higher the price.
What is the Law of Supply?
More of a good will be provided the higher its price, and less of a good will be provided at a lower price.
What are the three big economic indicators?
GDP, Consumer Price Index, and Unemployment.
What is an oppurtunity cost?
Benefits lost by making decisions one way or another.
What is a business cycle?
The natural expansion and contraction of economic growth.
What is a recession?
A period of temporary economic decline.
What is the difference between absolute and comparative advantage?
Absolute advantage means you have the monopoly on a good or service, while comparative means you have a lower opportunity cost in producing that good or service.
What are the three functions of money?
It acts as a medium of exchange, serves as a store of value, and as a unit of account.
Describe three monetary policy tools used by the Federal Reserve.
Open market operations, changing reserve requirements, and changing the discount rates.
What is the difference between a public and a private company?
A public company sells shares and a private one does not.
What is the difference between stock and bonds?
Stocks give you a small portion of a company, while bonds generate income through regular interest payments.
What is the difference between statutory law and common law?
Statutory Law is written and Common Law is based on past judicial opinions.
What is the principle of stare decisis?
Courts will adhere to a precedent in making decisions.
What are the four elements of a contract?
Offer and Acceptance, Consideration, Competent Parties, and Legal Purpose.
What are the three categories of intellectual property?
Patents, Trademarks, and Copyrights.
Profit
The difference between total revenue and costs.
Loss
Opposite of profit, when costs are greater than revenue.
Value
Worth of something in terms of money or something else.
Goods and Services
Entrepreneurship
Activity of setting up a business.
Economics
Condition of a group in regards to material prosperity
What are the primary functional areas of a business?
Management, Operations, Marketing, Accounting, and Finance.
Scarcity
How people satisfy unlimited wants and needs with limited resources.
Division and Specialization of Labor
Separation of labor in a production process based on skill.
Globalization
Spread of products, tech, and information across the globe.
Balance of Trade
Difference in value between country’s exports and imports.
Counter Trade
Goods or services are exchanged for other goods or services instead of hard currency.
Outsourcing
Obtaining from an outside supplier instead of using internal source.
Offshoring
Basing some of a company’s processes overseas.
Joint Venture
Strategic Alliance
licensing
Franchising
Foreign Direct Investment
Tariffs
Embargo
World Trade Organization (WTO)
GATT
Commodity Money
Fiat Money
M1 and M2
Bonds
Stocks
Initial Public Offering
Rule of Law
Purposes of Law
To establish standards, maintain order, resolve disputes, and to protect liberty and rights.
Compensatory and Punitive Damages
Product Liability
Strict Liability
Caveat Emptor
Consumer Protection Laws
Antitrust Laws
Note 
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