Intro to Business - Chapter 1 Vocabulary

Vocabulary flashcards covering key terms from Chapter 1 notes on introductory business concepts.

Business

An organization that provides goods or services to earn profits.

Profits

The financial gain calculated as sales revenues minus expenses.

External Environment

Everything outside an organization’s boundaries that might affect it.

Domestic

The environment in which a firm conducts operations and generates revenues within its home country.

Global

International forces such as trade agreements, international economic conditions, and political unrest.

Technological Environment

Work methods, electronics, and telecommunications that affect business.

Political-Legal Environment

The relationship between business and government.

Sociocultural Environment

Includes the personal and demographic characteristics of society.

Economic Environment

Conditions that exist in, or the state of, the economy.

Labor (Human Resources)

The physical and intellectual contributions of people to a business.

Capital

The financial resources needed to operate a business.

Entrepreneur

A person who accepts risks and spots opportunities to create a new business.

Physical Resources

Tangible items such as natural resources, buildings, machinery, and tools needed to operate.

Information Resources

Data and other information such as market forecasts and economic data.

Market Economy

An economic system that aims to create shared value between businesses and customers.

Demand

The willingness and ability of buyers to purchase a product (good or service).

Supply

The willingness and ability of producers to offer a product for sale.

Surplus

Occurs when supply exceeds demand.

Shortage

Occurs when demand exceeds supply.

Demand Curve

The graph showing the relationship between price and quantity demanded.

Supply Curve

The graph showing the relationship between price and quantity supplied.

Equilibrium Price

The price at which quantity demanded equals quantity supplied.

Market Price

The price at which quantity demanded equals quantity supplied for a product category (also called equilibrium price).

Equilibrium

The balance point in a market where quantity demanded equals quantity supplied.