Term
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Definition
| individuals or organizations who try to earn a profit by providing products that satisfy people's needs |
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Term
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Definition
| a good or service with tangible and intangible characteristics that provide satisfaction and benefits |
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Term
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Definition
| the difference between what it costs to make and sell a product and what a customer pays for it |
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Term
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Definition
| organizations that may provide goods or services but do not have the fundamental purpose of earning profits |
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Term
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Definition
groups that have a stake in the success and outcomes of a business
Anyone affected or impacted by a company’s decisions or actions or policies |
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Term
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Definition
| the study of how resources are distributed for the production of goods and services within a system |
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Term
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Definition
| land, forests, minerals, water, and other things that are not made by people |
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Term
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Definition
| the physical and mental abilities that people use to produce goods and services; also called labor |
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Term
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Definition
| the funds used to acquire the natural and human resources needed to provide products; also called capital |
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Term
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Definition
a description of how a particular society distributes its resources to produce goods and services unlimited demand, limited resources ownership and control of resources three main issues 1. what goods and services, and how much of each, will satisfy consumers' needs? 2. how will goods and services be produced, who will produce them, and with what resources will they be produced? 3. how are the goods and services to be distributed to consumers?
how a society allocates its resources to provide goods and services- unlimited demand
-limited resources |
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Term
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Definition
first described by karl marx as a society in which the people, without regard to class, own all the nation's resources.
business ownership- most businesses are owned and operated by the government
Competition- the government owns and operates everything
profits- excess income goes to the government
product availability and price- consumers have a limited choice of goods and services; prices are usually high
employment options-little choice in choosing a career; most people work for government-owned industries or farms.
ex. cuba, north korea |
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Term
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Definition
an economic system in which the government owns and operates basic industries but individuals own most businesses
business ownership-the government owns and operates major industries; individuals own small businesses
competition is restricted in major industries; encouraged in small business
profits- earned by small businesses may be reinvested in the business; profits from government owned industries go to the government
product availability and price- consumers have some choice of goods and services, prices are determined by supply and demand
employment options- some choice of careers; many people work in government jobs.
ex: sweden, israel
egalitarianism- equal distribution of income and social services |
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Term
| Capitalism, or free enterprise |
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Definition
an economic system in which individuals own and operate the majority of businesses that provide goods and services
business ownership- individuals own and operate all businesses
competition- encouraged by market forces and government regulations
profits- individuals are free to keep profits and use them as they wish product availability
price- consumers have a wide choice of goods and services; prices are determined by supply and demand
Employment options- unlimited choice of careers |
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Term
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Definition
| pure capitalism, in which all economic decisions are made without government intervention self-interest behavior- producers, consumers, labor force, investors, entrepreneurs regulated by competition, justice to earn profits by providing tangible and intangible products free to pursue profit, succeed or fail, make choices all resources are allocated to their most efficient uses |
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Term
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Definition
| economies made up of elements fro more than one economic system |
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Term
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Definition
| the number of goods and services that consumers are willing to buy at different prices at a specific time |
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Term
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Definition
| the number of products-goods and services- that businesses are willing to sell at different prices at a specific time |
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Term
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Definition
| the price at which the number of products that businesses are willing to supply equals the amount of products that consumers are willing to buy at a specific point in time |
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Term
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Definition
| the rivalry among businesses for consumers' dollars |
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Term
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Definition
| the market structure that exists when there are many small businesses selling one standardized product |
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Term
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Definition
| the market structure that exists when there are fewer businesses than in a pure- competition environment and the differences among the goods they sell are small |
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Term
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Definition
the market structure that exists when there are very few businesses selling a product
ex: iphones, airplanes |
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Term
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Definition
the market structure that exists when there is only one business providing a product in a given market
ex: electricity, water, cable |
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Term
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Definition
| the situation that occurs when an economy is growing and people are spending more money; their purchases stimulate the production of goods and services, which in turn stimulates employment |
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Term
|
Definition
a condition characterized by a continuing rise in prices
-Widespread increases in prices (too much money chasing the SAME amount of goods)
-Measured by Consumer Price Index (CPI)
-Value a “basket” of ~400 goods/services MONTHLY
-Government tries to reduce inflation
-HOW DOES INFLATION IMPACT PURCHASING POWER?
-Costs increase when wages do not
-HYPERINFLATION- can’t hold currency, wages don’t adjust |
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Term
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Definition
| a slowdown of the economy characterized by a decline in spending a during which businesses cut back on production and lay off workers |
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Term
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Definition
a decline in production, employment, and income
can lead to a depression |
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Term
|
Definition
the condition in which a percentage of the population wants to work but is unable to find jobs
Measures population over 16yrs who are ACTIVELY looking for work
-Frictional- people in between jobs
- Cyclical- seasonal jobs
-Structural- people are laid off, mismatch in supply and demand for jobs |
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Term
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Definition
| a condition of the economy in which unemployment is very high, consumer spending is low, and businesses output is sharply reduced |
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Term
| Gross domestic product (GDP) |
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Definition
| the sum of all goods and services produced in a country during one year |
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Term
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Definition
| the condition in which a nation spends more than it takes in from taxes |
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Term
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Definition
| an individual who risks his or her wealth, time, and effort to develop for profit and innovative product or way of doing something |
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Term
|
Definition
principles and standars that determine acceptable conduct in business
an individual's or a work group's decisions that society evaluates as right or wrong
decisions influenced by three main factors: individual moral standards, influence of managers and co-workers, and the opportunity to engage in misconduct |
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Term
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Definition
a business's obligation to maximize its positive impact and minimize its negative impact on society
four dimensions: economic, legal, ethical, and voluntary
direct link between social responsibility and profit |
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Term
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Definition
an identifiable problem, situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right or wrong. ethical or unethical
most common issue is a conflict of interest, exists when a person must choose whether to advance his or her own personal interests or those of others
2nd most common issue is abusive or intimidating behavior
another is fairness and honesty, communications, business relationships |
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Term
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Definition
| payments, gifts, or special favors intended to influence the outcome of a decision |
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Term
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Definition
| the act of taking someone else's work and presenting it as your own without mentioning the source |
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Term
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Definition
| formalized rules and standards that describe what a company expects of its employees |
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Term
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Definition
| the act of an employee exposing an employer's wrongdoing to outsiders, such as the media or government regulatory agencies |
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Term
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Definition
| the extent to which businesses meet the legal, ethical, economic, and voluntary responsibilities placed on them by their stakeholders |
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Term
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Definition
| the activities that independent individuals, groups, and organizations undertake to protect their rights as consumers |
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Term
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Definition
the buying, selling, and trading of goods and services across national boundaries
must consider social and cultural barriers
such as language, body language, holidays, local customs |
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Term
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Definition
| a monopoly that exists when a country is the only source of an item, the only producer of an item, or the most efficient producer of an item |
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Term
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Definition
| the basis of most international trade, when a country specializes in products that it can supply more efficiently or at a lower cost than it can produce other items |
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Term
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Definition
| the transferring of manufacturing or other tasks- such as data processing- to countries where labor and supplies are less expensive |
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Term
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Definition
| the sale of goods and services to foreign markets |
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Term
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Definition
| the purchase of goods and services from foreign sources |
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Term
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Definition
| the difference in value between a nation's exports and its imports |
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Term
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Definition
| a nation's negative balance of trade, which exists when that country imports more products than it exports |
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Term
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Definition
| the difference between the flow of money into and out of a country |
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Term
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Definition
| the physical facilities that support a country's economic activities, such as railroads, highways, ports airfields, utilities, and power plants, schools hospitals, communication systems, and commercial distribution systems |
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Term
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Definition
| the ratio at which one nation's currency can be exchanged for another nations currency |
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Term
|
Definition
a tax levied by a nation on goods imported into the country
fixed tariff- a specific amount of money levied on each unit of a product brought into the country
ad valorem tariff is based on the value of the item
critics say: inhibits free trade, and competition
supporters: insulate domestic industries, particularly new ones, against well-established foreign competitiors |
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Term
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Definition
| regulations that restrict the amount of currency that can be bought or sold |
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Term
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Definition
| a restriction on he number of units of a particular product that can be imported into a country |
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Term
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Definition
| a prohibition on trade in a particular product |
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Term
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Definition
the act of a country of business selling products at less than what it costs to produce them
permits quick entry into a market |
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Term
|
Definition
| a group of firms or nations that agrees to act a as a monopoly and not compete with each other, in order to generate a competitive advantage in world markets |
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Term
| General agreement on tariffs and trade (GATT) |
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Definition
| a trade agreement, originally signed by 23 nations in 1947, that provided a forum for tariff negotiations and a place where international trade problems could be discussed and resolved |
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Term
| world trade organization (WTO) |
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Definition
| international organization dealing with the rules of trade between nations |
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Term
| north american free trade agreement (NAFTA) |
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Definition
| agreement that eliminates most tariffs and trade restrictions on agricultural and manufactured products to encourage trade among Canada, the United States, and Mexico |
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Term
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Definition
| a union of european nations established in 1958 to promote trade among its members, one of the largest single markets today |
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Term
| asia-pacific economic cooperation |
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Definition
| an international trade alliance that promotes open trade and economic and technical cooperation among member nations |
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Term
|
Definition
| an organization established by the industrialized nations in 1946 to loan money to underdeveloped and developing countries; formally know as the international bank for reconstruction and development |
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Term
| international monetary fund |
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Definition
| organization established in 1947 to promote trade among member nations by eliminating trade barriers and fostering financial cooperation |
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Term
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Definition
| foreign trade agreements that involve bartering products for other products instead of for currency |
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Term
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Definition
| a firm that buys goods in one country and sells them to buyers in another country |
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Term
|
Definition
| a trade agreement in which one company- the licensor- allows another company- the licensee- to use its company name, products, patents, brands, trademarks, raw materials, and/or production processes in exchange for a fee or royalty |
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Term
|
Definition
| a form of licensing in which a company- the franchiser-agrees to provide a franchisee a name, logo, methods of operation, advertising, products, and other elements associated with a franchiser's business, in return for a financial commitment and the agreement to conduct business in accordance with the franchiser's stand of operations |
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Term
|
Definition
| the hiring of a foreign company to produce a specified volume of the initiating company's product to specification; the final product carries the domestic firm's name |
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Term
|
Definition
| the sharing of the costs and operation of a business between a foreign company and a local partner |
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Term
|
Definition
| a partnership formed to create competitive advantage on a worldwide basis |
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Term
|
Definition
| the ownership of overseas facilities |
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Term
| multinational corporation |
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Definition
| a corporation that operates on a worldwide scale, without significant ties to any one nation or region |
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Term
|
Definition
| a plan, used by international companies, that involves customizing products, promotion, and distribution according to cultural, technological, regional, and national differences |
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Term
| global strategy (globalization) |
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Definition
| a strategy that involves standardizing products (and as much as possible, their promotion and distribution) for the whole world, s if it were a single entity |
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Term
|
Definition
a business that is owned, and usually managed, by one person
Disadvantages
Unlimited liability- risks of personal loss
Limited sources of funds
Limited skills
Limited ability to attract & retain talent
Lack of permanence/
continuity
management difficulties
overwhelming time commitment
few fringe benefits
limited growth and life span
Advantages
Single Taxation- taxed as a personal income of the owner
Ease and cost of formation
Control of the business
Secrecy
Distribution and use of profits
Government regulation
Easy to open and close the business
being your own boss, pride of ownership, leaving a legacy, retention of company profit |
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Term
|
Definition
a legal form of business with two or more owners
Advantages
more financial resources
shared management and pooled/ complementary skills and knowledge
longer survival
no special taxes
Disadvantages
unlimited liability
division of profits
disagreements among partners
difficulty of termination |
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Term
|
Definition
a legal entity with authority to act and have liability separate from its owners
Advantages:
Limited liability
Transfer of ownership
Perpetual life
Access to sources of funds and credit
Expansion potential
more money for investment
size
perpetual life
ease of ownership change
ease of drawing talented employees
separation of ownership from management
Disadvantages:
Double taxation
Forming a corporation
Disclosure of information
Employee-owner separation
Government regulation
extensive paperwork
two tax returns
size
difficulty of oftermination (hard to end)
possible conflict with stockholders and board of directors
initial cost |
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Term
|
Definition
the responsibility of business owners for all of the debts of the business
YOU are completely responsible for all the debts,
Losses, and costs of a business. This means your personal savings can
Be seized to cover business costs |
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Term
|
Definition
a partnership in which all owners share in operating the business and in assuming liability for the business's debts
Advantages
Single Taxation
Ease of organization
Availability of capital and credit
Combined knowledge and skills
Decision making
Regulatory controls
Disadvantages
Unlimited liability
Distribution/Sharing of profits
Limited sources of funds
Decision making
Life of the partnership
Challenges to friendships |
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Term
|
Definition
| a partnership with one or more general partners and one or more limited partners |
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Term
|
Definition
| an owner (partner) who has unlimited liability and is active in managing the firm |
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Term
|
Definition
| an owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment |
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Term
|
Definition
the responsibility of a business's owners for losses only up to the amount they invest; limited partners and shareholders have limited liability
You are ONLY responsible for the amount you
Invested into the business, CANNOT be taken from personal assets |
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Term
| master limited partnership |
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Definition
| a partnership that looks much like a corporation in that it acts like a corporation and is traded on a stock exchange but is taxed like a partnership and thus avoids the corporate income tax |
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Term
| limited liability partnership |
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Definition
| a partnership that limits partners' risk of losing their personal assets to only their own acts and omissions and to the acts and omissions of people under their supervision |
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Term
| conventional C corporation |
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Definition
| a state-chartered legal entity with authority to act and have liability separate from its owners |
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Term
|
Definition
a unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships
Most popular form of corporation
Established in 1958 (effective corporate tax rates were 96% then)
Limited liability
Single taxation
limitations
Must be a domestic U.S. enterprise
Shareholders must be U.S. citizens (no foreign ownership)
Limited number of shareholders (100)
Limitations on who shareholders may be: individuals, estates, trusts
One class of stock
to qualify must have:
no more than 100 shareholders
have shareholders that are individuals or estates and are citizens or permanent residents of the U.S
Have only one class of outstanding stock
Not have more than 25% of income derived from passive sources |
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Term
| limited liability company |
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Definition
a company similar to an S corporation but without the special eligibility requirements
Not a Corporation
Established in 1988 -- “Business entity of the future”
Limited Liability
Choice of Taxation
Limitations
May have limited Life (30 years in some states)
No stock issuance; owners are “members”
Laws differ from state to state
Many Bars/Restaurants are LLCs today
Advantages
limited liability
choice of taxation
flexible ownership rules
flexible distribution of profit and losses
operating flexibility
Disadvantages
no stock
limited life span
fewer incentives
taxes
paperwork |
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Term
|
Definition
| the result of two firms forming one company |
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Term
|
Definition
| one company's purchase of the property and obligations of another company |
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Term
|
Definition
the joining of two companies involved in different stages of related businesses
ex: tire and car company combining |
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Term
|
Definition
| the joining of two firms in the same industry |
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Term
|
Definition
| the joining of firms in completely unrelated industries |
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Term
|
Definition
| an attempt by employees management, or a group of investors to purchase an organization primarily through borrowing |
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Term
|
Definition
| an arrangement where by someone with a good idea for a business sells the rights to use the business name and sell a product or service to others in a given territory |
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Term
|
Definition
| a company that develops a product concept and sells others the rights to make and sell the products |
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Term
|
Definition
the right to use a specific business's name and sell its products or services in a given territory
Advantages
management and marketing assistance
personal ownership
nationally recognized name
financial advice and assistance
lower failure rate
Disadvantages
large start-up costs
shared profit
management regulation
coattail effects
restrictions on selling
fraudulent franchisors
successful in international markets and U.S. due to convenience and a predictable level of service and quality
must adapt to region |
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Term
|
Definition
| a business owned and controlled by the people who use it- producers, consumers, or workers with similar needs who pool their resources for mutual gain |
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Term
|
Definition
| the process of creating and managing a business to achieve desired objectives |
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Term
|
Definition
any independently owned and operated business that is not dominant in its competitive area and odes not employ ore than 500 people
strength= ability to innovate and bring significant benefits to customers, job creation.
Advantages
independence
costs
flexibility
focus
reputation
Disadvantages
high stress level
high failure rate
undercapitalization
managerial inexperience or incompetence
inability to cope with growth |
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|
Term
| small business administration |
|
Definition
| an independent agency of the federal government that offers managerial and financial assistance to small businesses |
|
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Term
|
Definition
| the lack of funds to operate a business normally |
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Term
|
Definition
the recording, measurement, and interpretation of financial information used in making business decisions
basic principals: relevant, reliable, consistent, comparable |
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Term
| certified public accountant |
|
Definition
an individual who has been state certified to provide accounting services ranging from the preparation of financial records and the filing of tax returns to complex audits of corporate financial records
professional who provides accounting services to the public for a fee |
|
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Term
|
Definition
| accountants employed by large corporations, government agencies, and other organizations to prepare and analyze their financial statements |
|
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Term
| certified management accountants |
|
Definition
| private accountants who, after rigorous examination, are certified by the national association of accountants and who have some managerial responsibility |
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Term
|
Definition
the internal use of accounting statements by managers in planning and directing the organization's activities Management - managers Owners, Partners Board of Directors Department heads Employees
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Term
|
Definition
| the movement of money through an organization over a daily weekly, monthly, or yearly basis |
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Term
|
Definition
an internal financial plan that forecasts expenses and income over a set period of time
principal value of a budget lies in its breakdown of cash inflows and outflows. expected operating expenses (cash outflows such as wages, material costs, and taxes) and operating revenues (cash inflows in the form of payments from customers) over a set period of time are carefully forecast and subsequently compared with actual results |
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Term
|
Definition
summary of a firm's financial information, products, and growth plans for owners and potential investors
most important component- signature of a certified public accountant attesting that the required financial statements are an accurate reflection of the underlying financial condition of the firm.
if it meets these conditions its considered audited. |
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Term
|
Definition
| a firm's economic resources, or items of value that it owns, such as cash, inventory, land, equipment, buildings, and other tangible and intangible things |
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Term
|
Definition
| debts that a firm owes to others |
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Term
|
Definition
| equals assets minus liabilities and reflects historical values |
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Term
|
Definition
assets equal liabilities plus owners' equity
assets=liabilities+owner's equity |
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Term
|
Definition
| a system of recording and classifying business transactions that maintains the balance of the accounting equation |
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Term
|
Definition
| the four-step procedure of an accounting system: examining source documents, recording transactions in an accounting journal, posting recorded transactions, and preparing financial statements |
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Term
|
Definition
| a time-ordered list of account transactions |
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Term
|
Definition
| a book or computer file with separate sections for each account |
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|
Term
| Resources used to produce goods and services |
|
Definition
1. land (natural resources)
2. labor (workers)
3. capital (machines, tools, buildings, equipment)
4. entrepreneurship (desire to take a risk and start a business)
5. knowledge/ information |
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Term
|
Definition
| the state or quality of being efficient; competency in performance |
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Term
|
Definition
| the state or quality of being equal; correspondence in quantity, degree, value, rank, or ability. |
|
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Term
|
Definition
1723-1790, author, political economist, moral philosopher.
father of free trade and capitalism
competition fosters efficiency and low prices by forcing producers to offer the best products at the most reasonable price |
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Term
|
Definition
The degree to which a demand or supply curve reacts to a change in price
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Term
|
Definition
lots of alternatives, varying prices
ex: clothing, furniture
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Term
|
Definition
few or if any alternatives, pay any price
ex: gasoline, drinking water |
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Term
|
Definition
| The occurrence of widespread price increases (too much money chasing same amt of goods) measured by the consumer price index |
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Term
|
Definition
| Prices go down – less money chasing same goods Less money needed to buy an item Consumers wait for price to go down, so, they delay purchases |
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Term
|
Definition
| when a single firm can best serve society |
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Term
|
Definition
| The market may fail to allocate or account for all of the costs and benefits of a product
Externalities are over-produced Public goods are under-produced |
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Term
|
Definition
| Costs borne by unrelated third parties… Pollution Traffic congestion Resource Depletion Usually negative to society Over-produced in a Free Market |
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Term
|
Definition
social benefits are greater than private benefits
underproduced in a free market |
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Term
|
Definition
| private costs+externalities |
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|
Term
| Corporate Social Responsibility (CSR) |
|
Definition
| Taking into account / considering the interests of Stakeholders
~ Responsiveness to the needs of Stakeholders |
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|
Term
| Enlightened self interest |
|
Definition
Engaging in responsible conduct because it is in the best interest of your business
Taking into account the interests of stakeholders because it benefits your business
motive is key |
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Term
|
Definition
| Beliefs about what is right and wrong or good or bad in actions that affect others |
|
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Term
|
Definition
| A country specializes in products that it can supply more efficiently or at a lower cost than it can produce other items |
|
|
Term
|
Definition
A rare monopoly exists when a country is the
Only source of an item
Only producer of an item
Most efficient producer of an item |
|
|
Term
| organizational structures for international trade/ business |
|
Definition
import/export
licensing
franchising
contract manufacturing/ outsourcing
joint ventures
strategic alliances
FDI (foreign direct investment)
Multinational corporation
i like fun cuz jews ski fucking madly |
|
|
Term
|
Definition
| control, risk, investment, profit |
|
|
Term
| international trade barriers |
|
Definition
Economic
Technological
Legal/Political
Social/Cultural |
|
|
Term
|
Definition
level of countries economic development
currency exchange rates |
|
|
Term
|
Definition
Varying levels of technology and infrastructure development
Marketing data
Telephone lines
IT Networking
Delivery Trucks |
|
|
Term
| legal and political barriers |
|
Definition
Laws and regulations
Trade Restrictions/Protectionism
Political instability, sanctions |
|
|
Term
| social and cultural barriers |
|
Definition
Understanding differences among the cultures of countries -- VERY important
Spoken and written language
Body language and personal space
Family roles… Social roles... Gender roles…
Perception of time
Religious holidays and local customs |
|
|
Term
|
Definition
External Users
Used to report financial performance to any group outside the business
Government – SEC, IRS
Lenders
Investors
Suppliers
Customers
Labor Unions |
|
|
Term
|
Definition
Generally Accepted Accounting Principles
GAAP are guidelines/rules and procedures governing the form and content of financial reports and they are formulated by the Financial Accounting Standards Board
Measured in dollars
Entity-based
The business is a going concern
Record at cost
Dual-aspect (double-entry bookkeeping)
Based on an accounting period (usually one year)
Conservatism
Realization
Matching
Consistency
Materiality
Full Disclosure and Transparency |
|
|
Term
| international financial reporting standards |
|
Definition
GAAP – Maintained by FASB (Financial Accounting Standards Board)
IFRS – Maintained by IASB (International Accounting Standards Board
Increasing need for convergence / standardization / uniformity / comparability |
|
|
Term
|
Definition
| the extent to which the government is involved in regulation |
|
|
Term
|
Definition
| motivated by self interest |
|
|
Term
|
Definition
| GUPI GDP Unemployment Rate Productivity Inflation Rate |
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| output per person per hour -What affects productivity? -Computers -Education -Machinery -Competition -Fertilizers |
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-Less money chasing the same amount of goods, prices go DOWN
-Deflation causes people to “wait” leading the economy to grind to a halt or delay purchases
rising unemployment levels tend to stifle demand for goods and services, which can have the effect of forcing prices downward |
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-Agriculture
-Commerce
-Education
-Energy
-Health and Human Services
-Homeland Security
-Housing and urban development
-Interior
-Labor
-Transportation
-Treasury
-Environmental Protection
-Drug Control |
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Term
| channeling markets along competitive lines |
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Definition
-We DO NOT have an atomistic environment
1) If competition is not monitored anticompetitive behavior, collusion
-COLLUSION= Price Fixing
-Reduces competition
-Hurts consumer, no choices
2) Anti-Trust Activities- mergers/acquisitions
-Potential to reduce competition when companies get too BIG
-Companies can raise prices if they gain control
-EXAMPLE: Merger between Whole Foods and Wild Oats
3) Natural Monopolies
-When a single firm can best serve society (roads, subway transport, water, Telecom)
-Government Regulation |
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equality vs. fairness
-Egalitarian Ideas in politics but INEQUALITY in the end result/ Economic
system
-Right to Compete vs. Right to Succeed
-Arthur Okun- UNIVERSAL ENTITLEMENTS= Free, Universal, Non-
transferable (NOT involved in Economy) |
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| market failures- externalities and common goods |
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Definition
-Market may not accurately reflect the costs and benefits of a product
-Could lead to public goods under-produced and externalities over-produced
-EXTERNALITIES
-Costs made my unrelated third parties (pollution, traffic
congestion, resource depletion)
-Overproduced in the Free Market- BECAUSE there is NO INCENTIVE
to take on the unnecessary cost (Ex: Car companies producing
wasteful cars- don’t have to be responsible for the extra pollution)
-There are certain problems (defective medical hardware) that are
too costly in money and in lives and takes too long to let the market
correct on its own, therefore, the government steps in
-PUBLIC GOODS
-Has SOCIAL BENEFITS better than PRIVATE BENEFITS
-EX: Public Parks, Utilities, Street Lights, Police/Fire Protection
Defense, Clean Air
-UNDERPRODUCED in the Free Market- not profitable
SOCIAL COSTS (total costs)
-Private Costs- Everything a business owner has to pay to create their
product (rent, taxes, materials, etc.)
-Externalities or External Costs- Secondary effects from business, like
pollution
SOCIAL COSTS= Private Costs + Externalities
= Total Costs/ALL Costs |
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Definition
POWER IN NUMBERS
Exit= Quit, boycott, change brands, divest
Voice= Protest, write letters, cause negative publicity |
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Definition
The Law is an external guide, and ethics is an internal guide. The law
is limited and written in generalities and doesn’t cover ALL circumstances.
Laws can contradict your own ethics. |
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Definition
Provides positive opportunities and Negative Consequences
Organizational structures
i love fun cuz jews ski fucking madly
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TRADE PROTECTIONISM: The use of government regulation to limit the import of goods and services (to protect your own domestic industry)
Trade protectionism can be a POLITICAL action as well as an
ECONOMIC one
Tariffs
Quotas
Embargo
Subsidies
-Trade Protectionism PROTECTS domestic industries BUT reduces
competition and restricts free trade |
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Definition
land
labor
capital
entrepreneurship
knowledge/information technology
natural, human, and financial resources |
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Term
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Definition
involoves coordinating employees' actions to achieve the firm's goals, organizing people to work efficiently, and motivating them to achieve the business's goals.
production and manufacturing is another element
plan, organize, staff, control tasks required to carry out the work of the company or organization |
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Term
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Definition
main focus is to satisfy customers, includes all the activities designed to provide goods and services that satisfy customers needs
plan and develop products and make decisions about how much to charge for their products and when and where to make them available
use promotion- advertising, personal selling, sales promotion, and publicity- to communicate the benefits and advantages of their products to consumers and increase sales |
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Definition
primary responsibility of the owners to provide financial resources for the operation of the business
all activities concerned with obtaining money and using it effectively |
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Definition
| adam smiths idea- the government does not interfere in business |
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Definition
an opportunity for a business to succeed or fail on the basis of market demand. companies that can efficiently manufacture and sell products that consumers desire will probably succeed.
basic rights that must exist for this to work:
1. individuals must have the right to own property and to pass this property on to their heirs.
2. individuals and businesses must have the right to earn profits and use the profits as they wish, within the constraints of their society's laws and values
3. individuals and businesses must have the right to make decisions that determine the way the business operates.
4. individuals must have the right to choose what career to pursue, where to live, what goods and services to purchase, and more. Businesses must have the right to choose where to locate, what goods and services to produce, which resources to use in the production process, and so on. |
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Definition
the difference between our exports and our imports
if negative its called a trade deficit and is viewed as unhealthy for our economy |
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Definition
| measures changes in prices of goods and services purchased consumption by typical urban households |
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Definition
| indicates the income level of "average" americans. useful in determining how much "average" consumers spend and how much money Americans are earning |
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Definition
| the amount of goods and services produced for each hour worked |
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Definition
| devoted to manufacturing goods and providing services rather than producing agricultural products |
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Definition
| one devoted to the production of services that make life easier for busy consumers. |
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Definition
| business must not knowingly sell anything that could result in personal injury or harm to consumers. |
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Definition
| consumers the freedom to review complete information about the product before they buy it |
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Definition
| consumers have access to a variety of products and services at competitive prices |
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Term
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Definition
assures consumers that their interests will receive full and sympathetic consideration when the government formulates policy
fair treatment for consumers who complain about purchased product |
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Term
| industrialized nations// less developed countries |
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Definition
economically advanced countries such as USA, Japan, Great britain, Canada
africa, asia, south america are the opposite |
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Term
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Definition
a company may choose to deal with an intermediary when exporting goods overseas
agents usually handle international transactions for other firms |
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Definition
| foreign companies transfer tasks and jobs to U.S. companies, far more common than U.S. companies outsourcing tasks and jobs abroad |
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Definition
| involves the efforts of a group of stockholders or management to obtain all the firm's stock for themselves |
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Term
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Definition
accounting fit for legal review
involves analyzing financial documents in search of fraudulent entries or financial misconduct |
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Term
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Definition
day-to-day recording of business transactions
responsible for obtaining and recording the information that accountants require to analyze a firm's financial position |
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Term
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Definition
"top down" master budges begin at the upper management level and filter down to the individual department level
"bottom up" start at the department or project level and are combined at the chief executive's office. |
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Definition
| a summary of the balances of all the accounts in the general ledger |
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Definition
Self interested behavior: producers, consumers, labor force, investors
regulated by competition
social justice or conscience
ex: google,nike, home depot, bolder boulder
to earn profits by providing services and products
freedom- to make choices, fail or succeed
Self-interest and competition will result in the optimal quantity and variety of goods
The “Invisible Hand” guides the market
“Laissez Faire” – Government stays out
Society’s welfare is maximized |
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Definition
| anticompetitive behavior, price fixing |
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Term
| Anti-trust mergers/ acquisations |
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Definition
| potential to raise prices and reduce competition |
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Term
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Definition
-
- Efficiency vs. Equality/Fairness
- Egalitarian ideals in politics/society… but Inequality in economic system
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- The right to compete vs. the right to succeed
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- Rights/entitlements which are free, universal, nontransferable
Universal entitlements(rights) : Free, Universal, Non transferable
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Term
| International Trade Barriers |
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Definition
Economic- level of economic development, exchange rate
Technological- levels of development
Social/cultural- differences in culture
legal/political- political instibilites, sanctions, laws, protectionism |
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Definition
external
used by the company to report financial performance to any group outside of the business
ex of users:government, lenders, investors, suppliers, consumers, unions |
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Term
| Governing bodies of Accounting |
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Definition
SEC- securities and exchange commision
PCAOB-public company accounting oversight board
FASB-financial accounting standards board
IASB-international accounting standards board |
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