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Understanding Business: Unit 1 Exam Flashcards | StudBud
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Understanding Business: Unit 1 Exam
What are the benefits of mixed economies?
Consumer Price Index (CPI)?
Understanding Business: Unit 1 Exam
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Chapter 1-6
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Answers
1
Consumer Price Index (CPI)?
measures changes of sales of goods
gross output
measures changes of prices of about 400 goods & services that consumer buy
the development of resources
2
What are the benefits of mixed economies?
Benefits greater social equality
brings concern for the environment that socialism promises
Has most of the benefits of wealth creation that free markets bring
more control of the government
3
What is capitalism?
All or most of the means of production and distribution are owned by gov.
Production & distribution are owned privately and operated by businesses
Production & distribution are owned privately and operated for profit
All or most of the means of production and distribution are owned by you
4
Who decides what to produce under capitalism?
Cats
You
The President
Businesspeople
5
Ways in which a company can engage in global business
Franchising
Contract manufacturing, joint ventures
Licensing, direct foreign investment
Exporting, strategic alliances
6
How does socialism differ from communism?
It just does
Communism is more restrictive
There is more freedom in a communist economy
It doesn't
7
Why should nations trade with other nations?
No country is self-sufficient
countries like to be popular
natural resources & tech skills are not distributed evenly around the world
other countries need products that prosperous countries produce
8
How can we be assured of having enough resources?
don't use the resources
grow more
resource development
economic development
9
Who are stakeholders
environmentalists, elected government leaders
suppliers, dealers
bankers
customers, employees, stockholders
10
What is the theory of comparative advantage?
ban on the import or export of a certain products
gives the advantage to certain nations to import goods
countries sell products they produce efficiently & buy those they can't
agreement that created free-trade area
11
What is an embargo?
prohibits the importing and exporting of certain products
taxes on foreign products
offers pluses and minuses
purchase of goods and services
12
What is management's role in setting ethical standards?
They shouldn't be tolerant
They should send messages through their actions
it is not part of thier job description
Pay better to those that have good ethics
13
What are some of the forces that discourage participation in global business?
all of the above
legal and regulatory forces, as well as physical and environmental forces
economic and financial forces
sociocultural forces
14
What are the two branches of economics?
increase and decreased economics
big and small
fun and more fun
Microeconomics and macroeconomics
15
What are the advantages entrepreneurship?
More freedom in your work, financial independence, boosts self confidence
No money
Entrepreneurs take more risks and lose those benefits.
getting benefits like paid vacations and health insurance.
16
Why do many small businesses fail?
run out of money
poor location
managerial incompetence and inadequate financial planning
no structure
17
What are the four phases of business cycles?
economic boom, recession, depression, growth
economic boom, recession, growth, recovery
economic boom, recession, depression, economic growth
economic boom, recession, depression, recovery
18
What are some ways in which businesses meet and beat competition?
aim to exceed customer expectations
focus on making high-quality products, all the way to zero defects
Be rude to customers
Empower frontline workers
19
What is offshore outsourcing
purchase of goods & services from outside a firm than inside the company
lower standards of living
taxes on foreign products
global trade
20
What is the major challenge to global franchises?
language barriers
transfer an idea or product that worked well in the US to new culture
weather
currency
21
What is the role of a cooperative?
to acquire more economic power than they would as individuals
to create a master limited partnership
attract partners and stakeholders
To raise more money for advertising
22
What is fiscal policy?
government does not keep the economy stable
Gov. keeps economy stable by adjusting taxes or gov. spending
U.S. policy on current wages
Policy that creates competition for services
23
Why has there been such an increase in the number of home-based and web-based businesses in the last few years?
increase of power and decrease in price of computer technology
technology has not influenced the increase of home-based businesses
there has not been a change
the internet/social media
24
What are the benefits and drawbacks of being a franchisee?
high franchise fees, pride of ownership
proven management system, promotional assistance, shared profits
nationally recognized name and reputation, managerial regulation
guaranteed success and no failure
25
What are the basic rights people have under capitalism?
own private property, own a business and keep profits after taxes
No rights
right to freedom of choice
right to freedom of competition
26
What are the five factors of production?
land, labor, capital, entrepreneurship, knowledge
captial, entrepreneurship, production, land
money, labor, gains, cash, land
land, production, money, work, capital
27
What are some of the special problems that small-business owners have in dealing with employees?
having lunch together
making friends
finding competent employees
waking up
28
What is a free market?
buyers & sellers choose prices for good & services for production
buyers and sellers get along
Cats and dogs have fun
Price is good and everything is great with people
29
Reasons people start their own businesses?
growth, profit, money, knowledge
profit, loss, knowledge, growth
profit, independence, opportunity, and challenge
independence, challenge, knowledge
30
What is a merger?
a firm downsizing to a small business
a small business becoming an LLC
two firms forming one company
One firm becoming two
31
What is Gross domestic product product (GDP)?
the sum of goverment deficits over time
total value of final goods & services produced in a country in a given year
government department policy
management of the money supply and interest rates
32
What is a franchisee?
a great place to eat
a person that buys a franchise
a cooperative
buying the rights to use a business name & sell their products in new place
33
Why don’t more small businesses start trading globally?
financing
all of the above
bureaucratic red tape
culture
34
How can we tell if our business decisions are ethical?
Put our business decisions through an ethics check
Ask "Is it balanced?"
Ask "how will it make me feel?"
Ask "Is it Legal?"
35
What kinds of products can be imported and exported?
Only goods that have a tariff
all foods can be exported but technology cannot
not food
just about any product can be imported and exported
36
How can U.S. companies influence ethical behavior and social responsibility in global markets?
They create difficult measure to follow
Charge more for their products
make sure suppliers don't violate US human rights & environmental standards
make sure suppliers do violate US human rights & environmental standards
37
What are the three key elements of a general partnership?
friendship, structure, help
shared profits and losses, better structure, common ownership
common ownership, shared profits and losses, managing operations
Money, issues, ownership
38
What is Unemployment Rate?
The percent of lazy people that don't want to work
16 and older unemployed and tried to find a job within 4 weeks
Those that are 16 and younger that don't work
16 and older unemployed that never are looking for work
39
What sources of funds should someone wanting to start a new business consider investigating?
personal savings, robbing a bank
personal savings, family, banks, angels & venture capitalists, gov agency
lottery
personal savings, family, banks, angels & demons
40
What is socialism?
Economic system that some business should be owned by the government
All or most of the means of production are not owned by anyone
All or most of the means of production and distribution are owned by you
All or most of the means of production & distribution are owned the people
41
Why are small businesses important to the U.S. economy?
50% of GDP is from small business
80% of US workers' first jobs are in small businesses
30% of US workers' first jobs are in small businesses
15% of GDP is from small business
42
How do multinational corporations differ from other companies that participate in global business?
they have manufacturing facilities or other physical presence abroad.
They are easier to work with
They make over a billion dollars annually
They will never go bankrupt
43
What countries have mixed economies?
North Korea
United States
Germany
United Kingdom
44
What are the advantages and disadvantages of sole proprietorships?
pride of ownership, overwhelming time commitment
be your own boss, unlimited liability
ease of starting and ending, limited financial resources
no special taxes, limited life span
45
What have modern entrepreneurs done to ensure longer terms of management?
offered incentives
were positive when things went wrong
formed entrepreneurial teams with expertise in many skills
bought them food each week
46
What is a mixed economy?
taxes tend to be high to distribute income more evenly among people
Part capitalist and part socialist
A party economy
Some businesses are privately owned
47
What is absolute advantage?
selling products from another country
buying products from another country
theory that states that a country should sell to other countries
when a country produces a specific product more efficiently than all others
48
What is a micropreneur?
large businesses
small entrepreneurs
people that innovate and develop new product ideas internally
people willing to accept risk of a small business (stays small)
49
What goes into a business plan?
manufacturing plan, appendix
Cover Letter, executive summary, company background, management team
financial plan, capital required, marketing plan
location analysis
50
What is the relationship of businesses’ profit to risk assumption
Businesspeople don't make profits by taking risks
Stakeholders benefit
Businesspeople make profits by taking risks
there aren't any risks
51
What is Gross Output?
the measure of total sales volume at all stages of production
The measure of food grown in a country
The measure of free-market capitalism
The measure of goods produced
52
How is legality different from ethics?
Nothing is different between the two
Ethics includes abiding by moral standars accepted by society
Legality is more limiting
refers only to laws written to protect people from fraud, theft, & violence
53
What is economics?
study of how society chooses to use resources to produce goods & services
study of people
groups of people and individuals in America
study of food
54
What is intrapreneuring?
group of individuals that think big
a person that feels like starting a business but doesn't know how to start
people that innovate and develop new product ideas internally
small group of business owners that think big
55
Where can budding entrepreneurs find help in starting their businesses?
LOAN OFFICERS
PEER GROUPS
ACCOUNTANTS
SBA
56
What is a franchise?
a cooperative
buying the rights to use a business name & sell their products in new place
a person that buys a franchise
a great place to eat
57
What are the advantages of socialism?
More education, health care, and other benefits and work fewer hours
More social equity
right to own private property
Nothing good comes from socialism
58
Attributes of a successful entrepreneur?
self-nurturing
action-oriented
self-directed
highly energetic and tolerant of uncertainty
59
What are tariffs?
offers pluses and minuses
purchase of goods and services
taxes on foreign products
prohibits the importing and exporting of certain products
60
How has technology benefited workers, business, and consumers?
more effective, efficient, and productive
work 24/7
make more money
lazy
61
What hints would you give someone who wants to learn about starting a small business?
take courses
get experience from working for others
learn from others
all of the above
62
What are the disadvantages of entrepreneurship?
Gain freedom
More opportunity
Entrepreneurs take more risks and lose benefits
possible wealth
63
What is the goal of business leaders?
make money
recognize and respond to the needs of the business
help others
recognize & respond to needs of stakeholders and still make a profit.
