Shared Flashcard Set

Details

G202 Unit 1 exam
Topics 1-3 exam
58
Business
Undergraduate 1
02/09/2012

Additional Business Flashcards

 


 

Cards

Term
What is the goal of corporate social strategy
Definition
Integrate non-market forces (Political, Economic, Social, and Technological) into your market strategy.
Term
What 2 strategic acquisitions did BP make in the 21st century?
Definition
The Solarex acquisition made BP Solar the largest solar energy company in the world.
BP launched the ‘Beyond Petroleum’ campaign and began re-branding with the Helios logo.
Term
How did BP's move enhance brand equity and corporate reputation?
Definition
Differentiate from competitors.
Tap into new customer segments.
Employee retention/recruiting concerns.
Attract green/socially-responsible investors (SRIs).
Term
What risks did BP undertake when adopting Solarex?
Definition
Heightened public expectations, especially from NGOs.
Greenpeace awarded BP the Greenwash of the year.
- Ultimately criticized because they clearly were still primarily focusing on petroleum
Term
When do NGOs typically take political or direct action?
Definition
When market inefficiencies exist:
Lack of property rights, market power abuses, quality concerns, externalities (pollution), etc…
Term
The socially efficient production level
Definition
1. Produce and sell product that consumers value more than the costs of production.
2. Avoid producing and selling product that consumers value less than the costs of production.
Term
Consumer Surplus
Definition
Difference between what customers are willing to pay and the price they have to pay.
Term
Producer Surplus
Definition
Difference between the price sellers receive and the minimum supply price needed to cover costs.
Term
Where does social efficiency occur?
Definition
At the market equilibrium if all costs and value are accounted for in the D&S curves.
Term
What do taxes imposed on sellers do to the supply curve?
Definition
Cause an inward shift of the supply curve (decreased supply).
Term
What do subsidies to the seller do to the supply curve?
Definition
Cause an outward shift of the supply curve (increase supply).
Term
What does productive regulation on sellers do to the supply curve?
Definition
Cause an inward shift of the supply curve (decreased supply).
Term
What are voters viewed to be?
Definition
Rationally ignorant
-It is costly for you to become informed on most political issues.
-It is not likely that your individual vote will make a difference.
Term
What are politicians thought to be?
Definition
Vote-Maximizers
-Regardless of their ultimate motivation, the ability of politicians to achieve their goals depends on their election or re-election.
-Thus, Politicians try to provide information about themselves (and their rivals) at no charge to voters.
Term
Bureaucrats (civil servants) are considered to be what?
Definition
Budget-Maximizers
-Bureaucrats are not elected, but are hired into office much like what occurs in the private sector.
-Bureaucrats seek promotions, higher pay, prestige, job security, etc…,which all become more possible with a bigger budget
Term
4 possible types of inefficiencies in the public sector
Definition
The Shortsightedness Effect.
Lack of Operational Efficiency.
Lobbying/Rent Seeking.
The Special Interest Effect.
Term
Describe the shortsightedness effect
Definition
Politicians support projects that have:
Clearly defined current benefits,
and future costs that are difficult to identify.
Term
Due to its lack of profit motive, what occurs in government?
Definition
Operational inefficiency
Term
Lobbying/Rent Seeking
Definition
Devoting resources to influence public policy formation in order to bring more income to your interests.
Term
When does the cost of lobbying produce significant inefficiencies?
Definition
When its main affect is solely income redistribution
Term
3 main functions of Lobbyists
Definition
Find political opportunities and threats.
Inform politicians and influence public opinion.
Form coalitions: identify groups with ‘similar’ interests
Term
Special Interest Effect
Definition
Small group of people receive benefits at the expense of a large group.
Term
What group generally has a better chance of gaining political power?
Definition
Small, concentrated groups can gain political power.
-The individual benefits of taking action often exceed the potential individual costs.
Term
Majoritarian Politics
Definition
Widely Dispersed Costs and Benefits
No special interest groups take action on either side of the issue.
Example: Social Security
Lobbying does not occur
Term
Client Politics
Definition
Concentrated Benefits, Widely Dispersed Costs

One special interest group is active in favor of an issue.
Example: Subsidizing Foreign Advertising
Lobbying will likely be successful
Term
Interest Group Politics
Definition
Concentrated Benefits, Widely Dispersed Costs
Active special interest groups are on both sides of the issue.
Example: Minimum Legal Drinking Age
Outcomes depend on the relative strength of lobbying
Term
Entrepreneurial Politics
Definition
Widely Dispersed Benefits, Concentrated Costs

One special interest group is active against an issue.
Example: Nuclear Waste Dumps
Successful lobbying will be costly
Term
3 types of property rights
Definition
Communal
Government
Private Property
Term
Describe communal property rights
Definition
No single owner, everyone has access while it lasts.
Over-utilization occurs, and no one has incentive to conserve for the future.
Term
Government property rights
Definition
Property decisions made by a small group of elected political representatives.
Term
What incentives do Secure Private Property rights give owners
Definition
-Create value with property (benefit others)
-Maintain property and conserve for the future
-Innovate and create new technologies
-Engage in voluntary exchange
Term
Patent
Definition
Right to exclude all others from using, producing, or selling an invention.
Term
Trademark
Definition
A word, name, symbol, or device that is used in trade with goods to indicate their source.
Term
Copyright
Definition
Right to exclude all others from reproducing, distributing, or performing a work
Term
Expected Utility formula
Definition
(1-r)(Yo+G)+r(Yo-F)
Term
What is the only variable of crime government controls?
Definition
Level of punishment
Term
How do the government and consumers influence the likelihood of stopping a crime?
Definition
Government can affect this with detection technology
Criminals can affect this with their technology
Term
Difference between explicit and implicit costs
Definition
Explicit costs: when a monetary payment is made.
Example: Wages paid to labor.
Implicit costs involve the firm’s resources, but do not have a monetary payment.
Example: Opportunity cost of the owner’s investment.
Term
Economic Profit
Definition
Revenues minus all costs
Term
Normal Rate of Return
Definition
What firms could get by investing in businesses with similar risk.
Term
Entrepreneur and their roles
Definition
-Someone who tries to exploit opportunities that exist within markets.
-Offer New products or open new markets
-Create a lower cost technology
-Find new resources
Term
Intrepreneur and their roles
Definition
An entrepreneurial individual that is employed by a firm.
-Needed to keep ahead of rival firms.
-Needed to improve overall efficiency.
-An effort to keep the brightest minds within the corporation.
-Incentive to incorporate more profitable projects.
Term
Economic Freedom
Definition
Highest with low taxes, low regulation, secure property, and consistent legal structure.
Term
What is economic growth linked to?
Definition
Economic Freedom
-Economic freedom creates an environment that is conducive to entrepreneurship.
-Then entrepreneurial change leads to growth.
Term
Conflict of Interest
Definition
When a professional individual has a private interest, sufficient enough to influence the pursuit of their official duties
Term
3 Key elements of Conflict of Interest
Definition
Professional
Private or Personal Interest
Official Duty
Term
Self-Dealing
Definition
Use your position to secure personal benefits
Term
Influence Peddling
Definition
Use your position to secure benefits for a third party (anyone who is not yourself)
Term
Accepting Benefits
Definition
Receiving bribes or non-monetary gifts
Term
Misuse of Inside Information
Definition
Using Confidential Information
Term
Misuse of Employer's Property
Definition
Personally gaining from employers property without consent
Term
Outside Employment or Moonlighting
Definition
Holding multiple employment positions at one time, which biases professional behavior
Term
Post-Employment
Definition
Holding a sequence of employment positions where you carry a bias from one job to the next
Term
Corruption
Definition
The abuse of entrusted power for private gain
Term
Petty Corruption
Definition
Decisions made by low-level bureaucrats.
-Often centered on local/regional regulations, licenses, or discretionary spending
Term
Grand Corruption
Definition
Decisions made by high-level politicians.
-Often centered on national policy formation, infrastructure decisions, military equipment procurement, or allocation of subsidies.
Term
Describe the perception of corruption as "Sand"
Definition
Corruption is associated with (1) reduced GDP growth, (2) reduced foreign direct investment,(3) increased income inequality, and (4) a misallocation of government property
Term
Describe the perception of corruption as "oil"
Definition
Corruption helps to speed up commerce in an environment controlled by heavy bureaucracy and excessive regulation
Supporting users have an ad free experience!