Business Fundamentals: Chapter 1 Flashcards

A collection of vocabulary terms based on the introductory concepts of business, economics, and consumer roles from Chapter 1.

Business

An organization that produces or sells goods or services to satisfy the needs, wants and demands of consumers.

Profit

The income that is left after all costs and expenses are paid.

Expenses

Expenditures involved in running a business, such as energy, rent, and inventory.

Costs

The amount of money required for each stage of production, such as raw materials.

Profit calculation formula

$$\text{Profit (or loss)} = \text{Revenue} - \text{Expenses and Costs}$$

Non-profit business

An organization that raises funds for a specific goal, such as GreenPeace or World Vision.

Not-for-profit business

An organization where surplus funds are used to improve services for their members, such as Red Cross, Unicef, or World Wildlife Fund.

Small to Medium-sized Business (SMB)

A business that has fewer than 500 employees.

Goods

A tangible item that can be seen or touched.

Service

Assistance provided to a customer that is not a physical product.

Producer

An entity that makes goods or provides services that consumers need or want.

Consumer

An individual who purchases goods or services from producers.

Marketplace

The environment where producers and consumers come together to buy or sell.

Obsolete

A term describing products or services that people no longer want or that have been replaced by new and improved goods.

Competition

Occurs when two or more businesses try to sell the same type of product or service to the same customer.

Need

Things that are necessary for survival.

Want

Things that are not necessary for survival, but add comfort and pleasure to our lives.

Decision-Making Model: Step 1

Define the decision to be made.

Decision-Making Model: Step 2

Identify the alternatives.

Decision-Making Model: Step 3

Evaluate the alternatives.

Decision-Making Model: Step 4

Make a decision and take action.

Decision-Making Model: Step 5

Evaluate the decision.