Business 101 Exam #1
business - ANS-organization that proviedes goods or services to earn a profit
profit - ANS-difference between a business's revenues and expenses
external environment - ANS-everything outside an organization's boundaries that might
affect it
economic system - ANS-a nation's system for allocating its resources among its citizens
factors of production - ANS-resources used in the production of goods and services-
labor, capital, entrepreneurs, physical resources, and information resources
labor (human resources) - ANS-physical and mental capabilities of people as they
contribute to economic production
capital - ANS-funds needed to create and operate a business enterprise
entrepreneur - ANS-indicidual who accepts the risks and opportunities involved in
creating and operating a new business venture
intrepreneur - ANS-part of a company
planned economy - ANS-economy that relies on a centralized government to control all
or most factors of production and to make all or most production and allocation
decisions
communism - ANS-political system in which the government owns and operates all
factors of production
market economy - ANS-economy in which individuals control production and allocation
decisions through supply and demand
market - ANS-mechanism for exchange between buyers and sellers of a particular good
or service
capitalism - ANS-system that santions the pricate owndership of the factors of
production and encourages entrepreneurship by offering profits as an incentive.
, privatization - ANS-process of converting government enterprises into privately owned
companies
socialism - ANS-planned economic system in which the government owns and operates
only selected major sources of production
demand - ANS-the willingness and ability of buyers to purchase a good or service
supply - ANS-the willingness and ability of producers to offer a good or service for sale
pricate enterprise - ANS-economic system that allows individuals to pursue their own
interests without undue governmental restriction
competition - ANS-vying among businesses for the same resources or customers
perfect competition - ANS-market or industry characterized by numerous small firms
producing and identicle product
monopolistic competition - ANS-market or industry characterized by numerous buyers
and relatively numerous sellers trying to differentiate their products from those of
competitors
monopoly - ANS-market or industry in which there is only one producer that can
therefore set the prices of its products
natural monopoly - ANS-industry in which one company can most efficiently supply all
needed goods or services
standard of living - ANS-the total quantity and quality of goods and services people can
purchase witht the currency used in their economic system
gross domestic product (GDP) - ANS-total value of all goods and services produced
within a given period by a national economy through domestic factors of production
gross national product (GNP) - ANS-total value of all goods and services produced by a
national economy within a given period regardless of where the factors of production
are located
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