Chapter 1. Taking Risks and Making Profits within the Dynamic Business Environment

A(n)______ is defined as any activity that seeks to provide goods and services to others while operating at a profit.

Business

Carl's Car Care is a business that sells auto parts. Each month, Carl adds up the amount of money the store brought through the various auto parts it has sold to customers. Carl is calculating the store's ______.

Revenue

All of the groups that stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address represent the businesses' ______.

Stakeholders

Select all the purposes that nonprofit organizations may seek to achieve.

• using financial gains to meet a social goal

• increasing profits for shareholders

• increasing the stock price per share

• using financial gains to fill an educational goal

• using financial gains to meet a social goal

• using financial gains to fill an educational goal

Why might you choose to work for a company instead of being an entrepreneur?

• because you get to keep all the profits made by the business

• because being a company employee is riskier and more rewarding

• because the company assumes the risk if the business fails

• because you get the freedom to make the decisions that control the business

• because the company assumes the risk if the business fails

What is the best definition of a business?

• any activity that seeks to provide goods and services to others while operating at a profit

• any group of individuals that come together to achieve a goal

• an organization designed to improve the welfare of a society

• a socially responsible organization that is a not for profit

• any activity that seeks to provide goods and services to others while operating at a profit

The resources of land, labor, capital, entrepreneurship, and knowledge are ______.

• the factors of production

• products of a country

• the factors of technology

• elements of working capital

• the factors of production

A stakeholder is Blank______.

• any person or entity that has an interest in the success and outcomes of a business

• the largest shareholder of the firm

• a shareholder without voting rights at a shareholders’ meeting

• any person or entity that is owed money by a business

• any person or entity that has an interest in the success and outcomes of a business

Match the element of the business environment with the correct sector.

Demography is the statistical study of ______.

• the human population's characteristics such as size, density, age, gender, and income

• the environment and changes that affect global business

• businesses and their locations, sizes, and production levels

• global warming and its affect on wildlife, air quality, and water levels

• the human population's characteristics such as size, density, age, gender, and income

Which two factors are key in making the global environment of business so important that it encompasses all the other environmental influences?

• government protection of domestic producers

• the growth of global competition

• fluctuating currency exchange rates

• the negotiation of trade agreements among nations

• the negotiation of trade agreements among nations

• the growth of global competition

The term "factors of production" refers to the ______.

• the processes needed to produce goods and services

• regulations that interfere with the production of goods and services

• the factories and infrastructure that produce goods

• all the resources used in the creation of wealth

• all the resources used in the creation of wealth

The environments surrounding a business—such as the technological, competitive, and social environments—that either help or hinder the development of that business are referred to as ______.

• the factors of production

• economics

• the business environment

• the Invisible Hand

• the business environment

In the information age, a significant portion of a company’s value will be based on employee knowledge and skills that can be used to create new products, attract new customers, and increase profits. This is referred to as ______.

• intellectual capital

• brain drain

• employee empowerment

• the factors of production

• intellectual capital