O. C. Ferrell - Business Study Guide Chapters 1–3 Flashcards

Vocabulary flashcards covering key terms and concepts from Chapters 1, 2, and 3 of the Business Study Guide by O. C. Ferrell.

Business

An individual or organization that tries to earn a profit by providing products that satisfy people's needs and wants.

Product

Something that provides satisfaction or benefits to consumers, which can be categorized as goods, services, or ideas.

Goods

Tangible products that consumers can physically touch, such as cars, smartphones, and clothing.

Services

Intangible activities provided to customers, such as haircuts, legal advice, and medical appointments.

Ideas

Concepts or solutions that provide value, such as advertising concepts, intellectual property, and professional advice.

Profit

The financial reward obtained by a business, calculated as $\text{Profit} = \text{Revenue} - \text{Expenses}$.

Stakeholder

A person or group that has an interest in or is affected by a business, such as customers, employees, investors, suppliers, government, and community.

Economics

The study of how resources are distributed for the production of goods and services within a social system.

Scarcity

The economic condition in which resources are limited, while human wants are essentially unlimited.

Capitalism

An economic system in which individuals and businesses generally own resources and make economic decisions based on private ownership, profit motive, competition, and consumer choice.

Socialism

An economic system where the government owns or controls some major industries while individuals may own other businesses.

Communism

An economic system in which the government controls major resources and economic decisions through central planning with limited private ownership.

Mixed Economy

An economic system that features a combination of capitalism and government involvement, such as the economic system of the United States.

Supply

The quantity of a product that producers are willing and able to provide at a given price.

Demand

The quantity of a product that consumers are willing and able to purchase at a given price.

Equilibrium Price

The price point that occurs where supply and demand meet in the market.

Free-Enterprise System

An economic system that allows individuals and businesses substantial freedom to make economic decisions based on private property, freedom of choice, competition, profit motive, and entrepreneurship.

Gross Domestic Product (GDP)

The total market value of all final goods and services produced within a country's borders during a specific period.

Unemployment Rate

The percentage of the labor force that is unemployed and actively seeking work.

Inflation

A general increase in the prices of goods and services over time.

Recession

A period of significant decline in economic activity within the business cycle.

Entrepreneur

Someone who takes the financial risk of starting and operating a business.

Business Ethics

The principles and standards that determine acceptable conduct in business.

Law

Rules established and enforced by government.

Social Responsibility

The practice where businesses consider the effects of their actions on society.

Economic Responsibility

The foundational level of social responsibility where a business must be profitable.

Legal Responsibility

The level of social responsibility where a business must obey government laws and regulations.

Ethical Responsibility

The level of social responsibility where a business should do what is right, fair, and honest even when not required by law.

Philanthropic Responsibility

The top level of social responsibility where a business voluntarily contributes to society through donations, scholarships, and charitable activities.

Corporate Social Responsibility (CSR)

A company's consideration of its responsibilities toward society, such as reducing pollution and supporting communities.

Code of Ethics

A formal statement describing a company's expectations regarding ethical behavior.

Whistleblower

Someone who reports suspected illegal or unethical behavior within an organization.

Globalization

The movement toward a more interconnected global economy.

International Business

Business activities that cross national borders.

Import

Buying goods or services from another country.

Export

Selling goods or services to another country.

Balance of Trade

The difference between the value of a country's exports and imports.

Trade Surplus

An economic condition occurring when a country's exports exceed its imports ($\text{Exports} > \text{Imports}$).

Trade Deficit

An economic condition occurring when a country's imports exceed its exports ($\text{Imports} > \text{Exports}$).

Comparative Advantage

The ability of a country to produce a particular good or service at a lower opportunity cost than another country.

Absolute Advantage

The ability of a country to produce more of a good or service using the same amount of resources compared to another country.

Tariff

A tax placed on imported goods.

Quota

A limit placed on the quantity of a product that can be imported.

Embargo

A complete or near-complete restriction on trade with a particular country.

Protectionism

Government actions designed to protect domestic businesses from foreign competition.

Multinational Corporation (MNC)

A company that operates and maintains facilities in multiple countries.

Licensing

An agreement in which a company allows a foreign company to use its brand, patent, technology, or intellectual property in exchange for payment.

Franchising

An agreement allowing another party to operate a business using its established brand, business model, and products or services.

Joint Venture

A business partnership where two or more businesses cooperate to create or operate a business.

Direct Investment

A market-entry approach where a company directly invests in facilities or operations located in another country.