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MGG 150: Business and Society Exam #1
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MGG 150: Business and SocietyExam #1
Free enterprise
Individuals are free to - - decide what to produce, how to produce it, at what
price to sell it
- Why Study Business? - - For help in choosing a career, To be a successful
employee, To improve your management skills, To start your own business,
To become a better informed consumer
and investor
- What Is Business? - - The organized effort of individuals to produce and
sell, for a profit, the goods and services that satisfy society's needs
- Classification of Businesses - - Service and Manufacturing businesses and
marketing intermediaries
- Service Businesses - - Produce services, such as haircuts, legal advice, or
tax preparation (Ex. H&R Block)
- Manufacturing businesses - - Process various materials into tangible goods
(Ex. Intel)
- Marketing intermediaries - - Buy products from manufacturers and then
resell them (Ex. sony)
- What is e-Business? - - The organized effort of individuals to produce and
sell for a profit, the goods and services that satisfy society's needs through
the facilities available on the Internet
- e-business has become? - - An accepted method for conducting business
and a way for businesses to increase sales and profit and reduce expense.
- Profit - - remains after all business expenses have been deducted from
sales revenue
- Expense - - Money owed/spent
- negative profit - - when a firm's expenses are greater than its revenues
- Function of profit - - Reward for producing goods and services that people
want
, - Compensation for assuming the risk of ownership - - Risk of not receiving
payment, Risk of losing investment
- Stakeholders - - different people or groups of people who are affected by
the policies and decisions made by an organization
- Stakeholders include? - - Consumers, Marketing, intermediaries,
Stockholders, Employees
- Economics - - the study of how wealth (anything of value) is created and
distributed
- Microeconomics - - the study of the decisions made by individuals and
businesses
- Macroeconomics - - the study of the national and global economies
- Factors of production - - are the resources used to produce goods and
services
- Land and natural resource - - elements that can be used in the production
process
- Labor - - time and effort used to produce goods and services
- Capital - - money, facilities, equipment, and machines used in the
operation of organizations
- Entrepreneurship - - activity that organizes land and natural resources,
labor, and capital
- entrepreneur - - a person who risks his or her 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 own personal gain benefits others and a nation's economy
- Laissez-faire - - Smith's capitalistic system implies that there should be no
government interference in the economy, means "let them do" (as they see
fit), based on the concept of a market economy
, - market economy - - economic system in which businesses and individuals
decide what to produce and buy and the market determines prices and
quantities sold
- Mixed economy - - one that exhibits elements of both capitalism and
socialism and the four basic economic questions (what, how, for whom, and
who) are answered through the interaction of:
Households
Businesses
Governments
- In a mixed economy, the four basic economic questions (what, how, for
whom, and who) are answered through the interaction of - - Households,
Businesses, Governments
- Households interactions in a mixed economy - - Consume goods and
services, Own resources of some factors of production and Consumer
products
- Consumer products - - goods and services purchased by individuals for
personal consumption
- Businesses interactions in a mixed economy - - Produce goods and
services to exchange for revenues (money), Use revenues to purchase
factors of production
- Government interactions in a mixed economy - - Provides public services
in exchange for taxes
- command economy - - an economic system in which the government
decides what goods and services will be produced, How they will be
produced, For whom available goods and services will be produced, Who
owns and controls the major factors of production
- two types of economic systems serve as examples of command economies
- - Socialism
Communism
- Command Economy: Socialism - - Government decides what will be
produced, how it will be produced, and who owns and controls the factors
of production, Owns and controls key industries, Workers may choose their
own occupations, Goal is to equally distribute income, eliminate poverty,
provide social services, and eliminate economic waste, Small-scale private
businesses may be permitted
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