business 150 chapters 1-5

chapter 1: 1-38, chapter 2: 39-54, chapter 3: 55-82, chapter 4: 83-104, chapter 5: 105-116

free enterprise

individuals decide what to produce, how to produce it and what price to sell it at

cultural/ workplace diversity

a system that recognizes and respects the differences among people because of age, race, ethnicity, gender, sexual orientation, or ability

business

the organized efforts of individuals to produce and sell for a profit the goods and services that satisfy society's needs

e-business

business that can be accessed on the internet

profit

what remains after all business expenses have been deducted from sales revenue

stakeholder

all the differences people or groups of people who are affected by an organization's policies, decisions, and activities

economics

the study of how wealth is created and distributed

microeconomics

the study of the decisions made by individuals and buinesses

macroeconomics

the study of the national economy and global economy

economy

the way in which people deal with the creation and distribution of wealth

factors of production

inputs and resources used to produce goods and services

entrepreneur

a person who risks time, effort and money to start and operate a business

capitalism

an economic system in which individuals own and operate the majority of businesses that provide goods and services

invisible hand

a term created by adam smith to describe how an individual's personal gan benefits others and a nation's economy

market economy

an economic system in which businesses and individuals decide what to produce and by t and the market determines prices and quantitates sold

mixed economies

economy that exhibit elements of capitalism and socialism

consumer products

goods and services purchased for personal consumption

command economy

an economic system where the government decides what goods and services will be produced, how long they'll be produced, how they'll be produced, and who owns and controls the major factors of production

Gross Domestic Product (GDP)

the total dollar value of all goods and services produced by all people within the boundaries of a country during a specified time period (usually one year)

inflation

a general rise in prices

deflation

general decrease in prices

consumer price index (CPI)

a monthly index that measures the changes in prices of a fixed basket of goods purchased by a typical consumer in an urban area

producer price index (PPI)

a monthly index that measures prices that producers receive for their finished goods

business cycle

the recurrence of periods of growth and recession in a nation's economic activities

recession

two or more consecutive 3 month periods of decline in a country's GDP

depression

a severe recession that last longer than a typical recession and has a longer decline in business activity when compared to a recession

monetary policies

federal reserve's actions to promote maximum employment, stabilize prices, and increase or decline interest rates.

fiscal policy

government influence on the amount of savings and expenditures; accomplished by altering the tax structure and by changing levels of government spending

federal deficit

a shortfall created when the federal government spends more in a fiscal year than it receives

perfect/ pure competition

market situation where there are many buyers and sellers of a product and no single buyer or seller is powerful enough to affect the price of that product

market price

the price at which the quantity demanded is exactly equal to quantity supplied.

monopolistic competition

a market situation in which there are many buyers along with a relatively large number of sellers who differentiate their products from the products of competitors

product differentiation

the process of developing and promoting differences between a company's products and all its competitors

Oligopoly

a market in which there are few sellers

domestic system

a method of manufacturing in which an entrepreneur distributed raw materials to various homes where families would process them into finished goods to be offered for sale by the entrepreneur

factory system

a way of manufacturing where all the materials , machinery, and workers required to manufacture a product are assembled in one place

specialization

the separation of the manufacturing process into distinct tasks and the assignment of different individuals

service economy

an economy in which more effort is devoted to the production of services than to the production of goods.

ethics

the study of right and wrong and of the morality of the choices of individuals make

business ethics

the applications of moral standards to business situation

Sarbanes-Oxley Act of 2002

provides sweeping legal protection for employees who report corporate misconduct

code of ethics

a guide to acceptable and ethical behavior as defined by and organization

whistle blowing

informing the press or government officials about unethical practices within one's organization

social responsibility

the recognition that businesses' activities have an impact on society and the consideration of the impact on society and the consideration of the impact in the business decision making

corporate citizenship

adopting a strategic approach to fulfilling economic, ethical, environmental, and social responsibilities

caveat emptor

a Latin phrase meaning "let the buyer beware"

green marketing

promoting environmentally safe products

economic model of social responsibility

the view that society will benefit most when business is left alone to produce and market profitable products that society needs

socioeconomic model of social responsibility

the concept that business should emphasize not only profits but also the impact of its decisions on society

consumerism

all activities undertaken to protect the rights of consumers

affirmative action program

a plan designed to increase the number of employees from underrepresented groups at all levels within an organization

Equal Employment Opportunity Commission (EEOC)

a government agency with the power to investigation of complaints of employment discrimination and the power to sue firms that practice it

hard-core unemployment

workers with little education or vocational training and a long history of unemployment

social audit

a comprehensive report of what an organization has done and is doing with regard to social issues that affect it

absolute advantage

the ability to produce a specific product more efficiently than any other nation

comparative advantage

the ability to produce a specific product more efficiently than any other product

exporting

selling and shipping raw materials or products to other nations

importing

purchasing raw materials or products in other nations and bringing them into one's own country

balance of trade

the total value of a nations exports minus the total value of its imports over a specified period of time

trade deficit

a negative balance of trade

balance of payments

the total flow of money into a country minus the total flow of money out of that country over a specified period of time

trading company

provides a ling between buyers and sellers in different countries

counter trade

an international barter transaction

licensing

a contractual agreement in which one firm permits another to produce and market its product and to use its brand name in return for a royalty or other compensation

contract manufacturing

an agreement in which one firm contracts with another business, often in another country, to manufacture products or product components to its specifications

outsourcing

an arrangement in which one firm contracts manufacturing or other activities to a firm in another country that specializes in those activities and can offer them at a lower cost than domestic firms

strategic alliance

a partnership formed to create competitive advantage on a worldwide basis

multinational corporation

a firm that operates on a worldwide scale without ties to any specific nation or region

tariff

a tax levied on a particular foreign product entering a country

dumping

exportation of large quantities of a product at a price lower than that of the same product n the home market

non-tariff barriers

a non tax measure imposed by a government to favor domestic over foreign suppliers

import quota

a limit on the amount of a good that may be imported into a country during a given period of time

embargo

a complete halt to trading with a particular nation or of a particular product

exchange control

a restriction on the amount of a particular foreign currency that can be purchased or sold

currency devaluation

the reduction of the value of a nation's currency relative to the currencies of other countries

General Agreement on Tariffs and Trade (GATT)

an international organization of nations dedicated to reducing tariffs to world trade

world trade organization

powerful successor to GATT that facilitates world trade among member nations by mediating disputes and fostering efforts to reduce trade barriers

economic community

an organization of nations formed to promote free movement of resources and products among its members and to create common economic policies

export import bank of the US

an independent agency of the US government whose function is to assist in financing the exports of American firms

multilateral development bank (MDB)

an internationally supported bank that provides loans to developing countries to help them grow

World Bank

a cooperative banking institution with 189 member countries

International Monetary Fund (IMF)

an international bank that makes short-term loans to developing countries experiencing balance-of-payment deficits

sole proprietorship

a business that is owned and usually operated by one person

unlimited liability

a legal concept that holds a business owner personally responsible for all the debts of the business

partnership

a voluntary association of two or more persons to act as co-owners of a business for profit

general partner

a person who assumes full or shared responsibility for operating a business

limited partner

a person who invest money in a business but has no management responsibility or liability for losses beyond the amount they invested in the partnership

corporation

an artificial person created by law with most of the legal rights of a real person

stock

the shared of ownership of a corporation

stock holder

a person who owns a corporations stock

closed (private) corporation

a corporation whose stock is owned by relatively few people and is not sold to the general public

open (public) corporation

a corporation whose stock can be bought and sold by any individual

domestic corporation

a corporation in the state in which it is incorporated

foreign corporation

a corporation in any state in which it does business except the one in which it is incorporated

Alien Corporation

a corporation chartered by a foreign government and conducting business in the United States

dividend

a distribution of earnings to the stockholders of a corporation

proxy

a legal form listing issues to be decided at a stockholders' meeting and enabling stockholders to transfer their voting rights to some other individual or individuals

corporate officers

the chairman of the board, president, executive vice presidents, corporate secretary, treasurer, and any other top executive appointed by the board of directors

limited liability

a feature of corporate ownership that limits each owner's financial liability to the amount of money that he or she has paid for the corporation's stock

S corporation

a corporation that is taxed as though it were a partnership