Exploring Business (Bus1500) Exam 1
Exploring Business (Bus1500) Exam 1 BUS 1500
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This 5 page Study Guide was uploaded by Carley Notetaker on Wednesday September 23, 2015. The Study Guide belongs to BUS 1500 at Youngstown State University taught by Francis Guy Sole in Summer 2015. Since its upload, it has received 131 views. For similar materials see Exploring Business in Business at Youngstown State University.
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Date Created: 09/23/15
Exploring Business Study Guide Exam 1 Ch 1 0 Business an exchange activity that provides goods and services that satisfy wants and needs of a society for a pro t any pro tseeking organization that provides goods and services designated to satisfy customers needs 0 Pro t revenuecost if it s not a pro t it s a loss money left over after all the costs involved in doing business have been deducted from revenue 0 Revenue costpro t money a company brings in through the sale of goods and services 0 Pro t is the motivation 0 NonPro t Organization the motivation isn t to make a pro t it s to help someonesomething 0 Don t have owners don t get taxed contributions are tax deductible ForPro t Organization the motivation is to make a pro t has owners pro t goes to owners 0 Government revenue comes from taxes for bene t of US 1 Makes laws laws keep everything in order 2 Enforces the laws 3 Keeps society safe 0 Stakeholders any person or group impacted by the decisions andor actions of an organization are stakeholders of that organization 0 Business Model a concise description of how a business intends to generate revenue 0 Competitive Advantage some aspect of a product or company that makes it more appealing to target customers 0 Goods Producing Business create value by making things that are tangible Service Business create value by performing activities Barrier to Entry any resource or capability of a company must have before it can start competing Social Environment trends and forces in society at large Professionalism quality of performing at a high level and conducting oneself with purpose and pride Ch 2 0 Economic System allocates a nation s resources to satisfy the needs of it s citizens 0 Five Factors of Production 1 Natural Resources occurs in nature and is useful 2 Human Resources people capable of work and willing to work 3 Capital when humans interact with natural resources and produce something that s useful and used again 4 Knowledge combined intelligence used for a purpose 5 Entrepreneurship taking a risk to do something new Economy sum total of all economic activity within a given region Economics study of how a society uses its scarce resources to produce and distribute goods and services Capital the funds that nance the operations of a business as well as physical humanmade elements used to produce goods and services Knowledge expertise gained through experience Scarcity a condition of any productive resource that has nite supply Economic System policies that de ne a society s particular economic structure Free Market System decisions about what to produce and in what quantities are decided by the market s buyers and sellers Capitalism economic system based on economic freedom and competition Planned System government controls most factors of production and regulates allocation Socialism public ownership and operation of key industries combined with private ownership and operation of lessvital industries Nationalizing a government s takeover of selected companies or industries Privatizing turning over services once performed by the gov t to private businesses Demand buyer s willingness and ability to purchase products at various prices Supply speci c quantities of a product the seller is able to and willing to provide Demand Curve graph of quantities of a product that buyers will purchase Supply Curve graph of quantities of a product that sellers will offer for sale regardless of demand Equilibrium Point point at which quantity supplied equals quantity demanded Competition rivalry among businesses for the same customers Ch Pure Competition a situation in which so many buyers and sellers exist that no single buyer or seller can individually in uence market prices Monopoly one company dominates a market to the degree that I can control prices Monopolistic Competition many sellers differentiate their products from those of competitors in at least some small way Oligopoly a very small number of suppliers sometimes only two provide a particular good or service Recession a period during which national income employment and production fall at least 6 months of decline in the GDP Business Cycles uctuations in the rate of growth that an economy experiences over a period of several years Unemployment Rate the portion of the labor force currently without a job everyone over 16 looking for a job ln ation an economic condition in which prices rise steadily throughout the economy De ation an economic condition in which prices fall steadily throughout the economy Regulation relying more on laws and policies than on market forces to govern economic activity Monetary Policy government policy and actions taken by the Federal Reserve Board to regulate the nations money supply Fiscal Policy use of government revenue collection and the spending to in uence the business cycle Economic Indicators stats that measure the performance of the economy 0 Leading Indicators predict future level of economic activity ex housing startspermits issued 0 Lagging lndicators con rm current level of economic activity Consumer Price Index CPI a monthly stat that measures changes in the prices of a representative collective of consumer goods and services Producer Price Index PPI a statistical measure of price trends at the producer and wholesaler levels Gross Domestic Product GDP the value of all the nal goods and services produced by businesses located within a nation s borders excludes outputs from overseas operations of domestic companies Gross National Product GNP always going to be bigger than GDP Sole Proprietorship a business owned by a single person easy to start you get all of the pro t you re in complete control limited resources unlimited liability Unlimited Liability a legal condition under which any damages or debts incurred by a business are the owner s personal responsibility Partnership an unincorporated company owned by two or more people partnership agreement somewhat simple to start taxed at the individual level more resources longer lifetime limited privacy con icts expansion succession termination unlimited liability 0 General Partnership a partnership in which all partners have joint authority to make decisions for the rm and joint liability for the rm s nancial obligations Limited Partnership a partnership in which two or more persons act as general partners who run the unincorporated business and have the same unlimited liability as sole proprietors special partnership agreement that establishes generalmanager partners and limited partners limited liability limited to the amount of money they have invested Limited Liability a legal condition in which the maximum amount each owner is liable for is equal to whatever amount each invested in the business Master Limited Partnership MLP A partnership that is allowed to raise money by selling units of ownership to general public Limited Liability Partnership LLP a partnership in which each partner has unlimited liability only for his or her own actions and at least some degree of limited liability for the partnership as a whole Corporation a legal entity distinct from any individual persons that has the power to own property and conduct business articles of corporation legal entity shareholdersstockholders ownerslegally separated from corp board of directors long life limited liability unlimited resources no privacy very complex double taxation Shareholders investors who purchase shares of stock in a corporation Public Corporation a corporation in which stock is sold to anyone who has the means to buy it double taxation Private Corporation a corporation in which all the stock is owned by only a few individuals or companies and is not made available for purchase by the public Liquidity a measure of how easily and quickly an asset such as corporate stock can be converted into cash by selling it S Corporation a type of corporation that combines the capital raising options and limited liability of a corporation with the federal taxation advantages of a partnership Limited Liability Company LLC a structure that combines limited liability with the passthrough taxation bene ts of a partnership the number of shareholders is not restricted nor is members participation in management Bene t Corporation a pro tseeking corporation whose charter specifies a social or environmental goal that the company must pursue in addition to pro t Board of Directors a group of professionals elected by shareholders as their representatives with responsibility for the overall direction of the company and the selection of top execques Corporate Governance all the policies procedures relationships and systems in place to oversee the successful and legal operation of the enterprise Proxy a document that authorizes another person to vote on behalf of a shareholder in a corporation Corporate Of cers the top executives who run a corporation Chief Executive Of cer CEO the highestranking officer of a corporation Merger an action taken by two companies to combine as a single entity Acquisition an action taken by one company to buy a controlling interest in the voting stock of another company Hostile Takeover acquisition of another company against the wishes of management Leveraged Buyout LBO acquisition of a company s publicly traded stock using funds that are primarily borrowed usually with the intent of using some of the acquired assets to pay back the loans used to acquire the company Strategic Alliance a longterm partnership between companies to jointly develop produce or sell products Joint Venture a separate legal entity established by two or more companies to pursue shared business objectives
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