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