Mixed economy

.
Entrepreneurial resources
The initiative to combine natural, human, and capital resources
Opportunity cost
Value of the next-best alternative that is forgone to produce or obtain
another product
Competitors
Economic decision-making
Economic resources
Private property
Right to purchase, use, and discard of things of value
Services
Activities that can be consumed at the time of purchase to satisfy
needs and wants
Scarcity
Condition that exists when wants or needs exceed resources available
Economics
Study of the decisions made for production, distribution, and
consumption of goods and services to satisfy needs and wants
Needs
Necessities required for living
Consumer
Necessities required for living
Buys and uses the goods and services
Capital resources
Goods and money used in the production of goods and services
Natural resources
Raw materials supplied by nature
Human resources
People using efforts, knowledge, and skills at work to produce goods
and services
Free enterprise
Economic system which freedom to consume and produce goods and
services exists

Traditional economy
Economic system in which decisions are based on customs and
centered on family
Goods
Items purchased to satisfy needs and wants
Profit
Money left after selling goods and services and costs of operating a
business have been paid
Wants
Goods that are purchased to add comfort or pleasure to life
Marketplace
Anywhere goods and services exchange hands
Marketplace
Process of giving up something for gaining something else
Market economy
Goods and services are owned and controlled by the people
Freedom of choice
Opportunity to make choices of goods and services and accept
consequences of decisions
Command economy
Economics system in which the government owns resources and
dictates what is produced
Market price
The point where supply and demand are equal
1.02
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Deflation
A decrease in the general price level
Business Cycle
The movement of an economy from one condition to another and
back again
Capital Project Spending
Spending by businesses for items such as land, buildings, and
equipment

Budget Surplus
Government spends less than it takes in
Depression
A phase marked by a long period of high A unemployment, weak
consumer sales, and business failures
Bond
Represents debt for an organization
Personal Income
Salaries and wages as well as investment income and government
payments to individuals
GDP Per Capita
The Gross Domestic product (GDP) divided by the total population of
a country
Productivity
Production output in relation to a unit of input, such as a worker
Recovery
The phase in which unemployment decreases, demand for goods and
services increases, and GDP begins to rise
Inflation
An increase in the general price level
Stock
Represents ownership in a corporation
Budget Deficit
Government spending more than it takes in
Unemployment Rate
The portion of people in the labor force who are not working
Retail Sales
The sales of durable and nondurable goods bought by consumers
Prosperity
A period in which unemployment is low, businesses produce many
goods and services, and wages are good
Price Index
A number that compares prices in one year with some earlier base
year
Recession

A period in which demand, production, and GDP growth decreases

and unemployment begins to rise
National Debt
The total amount owed by the federal government
Gross Domestic Product
The total value of all final goods and services produced in a country
in one year (GDP)
Domestic Business
Making, buying and selling of goods and services within a country
International Business
business activities needed for creating, shipping, and selling goods
and services across national borders. Also referred to as "foreign"
trade or "world trade
Absolute Advantage
exists when a country can produce a good or service at a lower cost
than other countries
Comparative Advantage
a situation in which a country specializes in the production of a good
or service at which it is relatively more efficient
Imports
items bought from other countries
Exports
Goods and services sold to other countries
Foreign Debt
the amount a country owes to other countries
Balance of Payments
The difference in the amount of money that comes into a country and
the amount that goes out of it
Positive or Favorable Balance of Payment
occurs when a nation receives more money in a year than it pays out
Negative or Unfavorable Balance of Payment
occurs when a nation pays out more money than it takes in in a year
Exchange Rate
the value of a currency in one country compared to the value of
another

Foreign Exchange Market

Banks buying and selling different currencies
Culture
the accepted behaviors, customs, and values of a society
Infrastructure
a nation's transportation, communications, and utility systems
Trade Barriers
Restrictions to free trade created by governments
Formal Trade Barriers
Political actions such as quotas, tariffs and embargoes
Informal Trade Barriers
Restrictions to trade based on culture, traditions, and religion
Quota
Limits set by governments on quantities of a product that may be
imported or exported
Tariff
a tax that a government places on certain imported products
embargo
when the government stops the import or export of a product
completely
Free Trade Zone
a selected area where products can be imported duty-free and then
stored, assembled, and/or used in manufacturing.
Free Trade Agreement
When member countries agree to remove duties and trade barriers
on products traded among them
common market
companies are free to invest in each other's country. also known as an
"economic community"
Multinational Company (MNC)
an organization that does business in several countries
Home Country
Where the home office of a Multinational Company is located
Host Country

The foreign country where a multi-national country places business

activities
Global strategy
using the same product and marketing strategy worldwide.
Multinational Strategy
treats each country market differently
Licensing
selling the right to use some intangible property(production process,
trademark, or brand name) for a fee or royalty
Franchise
the right to use a company name or business process in a specific way
Joint Venture
an agreement between two or more companies to share a business
project
World Trade Organization (WTO)
created in 1995 to promote trade around the world
International Monetary Fund
created in 1946 to help promote economic cooperation between
countries
World Bank
provides economic aid to less developed countries
Interest Rates
The cost of using somone else's money
2.01
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Proprietorship
a business owned and run by just one person. It is the most common
form of business ownership
Partnership
a business owned and controlled by two or more people who have
entered into a written agreement.
Corporation
a separate legal entitiy formed by documents filed with your state.
Owned by one or more shareholders and managed by a board of
directors

Partnership Agreement
a written agreement among all owners of a partnership
Articles of Incorporation
a written legal document that defines ownership and operating
procedures and conditions for the business
Board of Directors
the people who will make the major policy and financial decisions for
a corporation
Limited Liability Partnership
a partnership in which some investors cannot lose more than the
amount of their investment, but are not allowed to participate in the
day-to-day management of the business.
Joint Venture
a unique business organization by two or more other businesses to
operate for a limited time and for a specific project. It is a type of
partnership.
S-Corporation
A corporation which passes all income through to the owners based
on their investment and is taxed on their individual tax returns.
Limited Liability Company (LLC)
A corporation which is much like a partnership and limits the liability
of the owners
Nonprofit Corporation
a group of people who join to do some activity that benefits the
public.
Cooperative
is formed by a group of people who cooperate to provide goods and
services that they all need. It is owned by the members.
Franchise
a written contract granting permission to operate a business to sell
products and services in a set way.
Franchisor
The company that owns a product or service and grants the rights to
sell products and services in a set way to another business
Franchisee
A company that purchases the right to to sell products and services of
another company in a set way

General Partner
plays an active role and has unlimited liability. (every partnership
must have at least one general partner.)
Limited Partner
participates as an investor in the partnership but has limited
liablility.
Secret Partner
plays an active role but is secret from society
Dormant Partner
plays no role and is not know to the public
Silent Partner
does not have an active role but is know to the public.
Domestic Corporation
corporation chartered in a specific state
Foreign Corporation
corporation chartered in one state but doing business in another
state.
Alien Corporation
corporation chartered in another nation but doing business in a state.
Public Corporation
corporation established for government purposes.
Private Corporation
corporation established by individuals for business or charitable
purposes.
2.02
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Management
the process of accomplishing the goals of an organization through the
effective use of people and other resources.
Planning
involves analyzing information, setting goals, and making decisions
about what needs to be done.
Organizing
means identifying and arranging the work and resources needed to
achieve the goals that have been set.

Staffing
includes all of the activities involed in obtaining, preparing, and
compensating the employees of a business.
Implementing
the effort to direct and lead people to accomplish the planned work of
the organization.
Controlling
determines to what extent the business is accomlishing the goals it
set out to reach in the planning stage.
Management Style
the way a manager treats and involves employees
leadership
the ability to motivate individual and groups to accomplish important
goals
human relations
the way people get along with each other.
influence
enables a person to affect the actions of others.
informal influence
the leadership role is not part of a formal structure
formal influence
the leadership position is part of the organization's structure
ethical business practice
ensure that the highest standards of conduct are observed in a
company's relationships with everyone who is a part of the business
or is affected by the business' activities.
core values
the important principles that will guide decisions and actions in the
company.
Executives
top-level managers with responsibilities for the direction and success
of the entire business
Mid-managers
specialists with responsibilities for specific parts of a company's
operations
supervisors

the first level of management in a business

Tactical management
a management style in which the manager is more directive and
controlling
Strategic management
A management style in which managers are less directive and involve
employees in decision making
mixed management
the combined use of tactical and strategic management
position influence
the ability to get others to accomplish tasks because of the position
the leader holds
reward influence
results from the leader's ability to give or withhold rewards
expert influence
arises when group members recognize that the leader has special
expertise in the area
Identity influence
stems from te personal trust and respect members have for the leader
Ethics
the principles of conduct governing an individual or a group
Workforce
...
Downsizing
a planned reduction in the number of employees needed in a firm in
order to reduce costs and make the business more efficient.
Outsourcing
removes work from one company and sends it to another company
that can complete it at a lower cost.
Job Analysis
a specific study of a job to identify in detail the job duties and skill
requirements
Compensation
the amount of money paid to an employee for work performed
Salaries and Wages

The 2 methods of direct payment of money to an employee for work

completed
Benefits
Compensation in forms other than direct payment
Incentive
systems connect the amount of compensation to the quality or
quantity of an employee's performance.
Promotion
the advancement of an employee to a position with greater
responsibility
transfer
the assignment of an employee to another job in the company with a
similar level of responsibility
termination
ends the employment relationship between a company and an
employee
Organizational Culture
the environment in which people work, made up of the atmosphere,
behaviors, beliefs, and relationships.
Work Environment
the physical conditions and the psychological atmosphere in which
employees work
Labor Union
an organized group of employees who negotiate with employers
about issues such as wages and work conditions.
glass ceiling
is an artificial limit placed on minority groups moving into positions
of authority and decision-making.
Occupational Outlook Handbook
offers up-to-date information about the U.S. workforce
Service-producing industries
businesses that perform services that satisfy tne needs of other
businesses and consumers
Goods-producing industries
businesses that produce or manufacture products used by other
businesses or purchased by final consumers

White-collar worker
one whose work is more mental than physical and involves the
handling and processing of information
Blue-collar worker
one whose job involves a great deal of manual work including the
operation of machinery and equipment or other production activities.
Technology
the use of automated machinery, electronic equipment, and
integrated computer systems to help increase the efficiency of
producing goods and services
Human Resources
the people who work for a business
Planning and staffing
A human resource activity involved in identifying and filling all of the
jobs in the company with qualified people
performance management
A human resource activity involved in evaluating the work of
employees and improving performance through training and
development
Compensation and benefits
a human resource activity involved in planning and managing
payroll, personnal records, and benefits programs.
Permanent employee
an employee to whom a company makes a long-term commitment.
Temporary employee
an employee who is hired for a specific time or to complete a specific
assignment
Full-time employee
an employee who regularly works a schedule of 30 hours or more per
week
Part-time employee
an employee who usually works less than 30 hrs per week either
through shorter hours per day or fewer days per week
Commission
a form of pay in which an employee is paid a percentage of sales for
which he or she is responsible
Piece Rate

A form of pay in which an employee receives a specific amount for

each unit of work produced
Base plus incentive
combination of a wage or salary with an additional amount based on
the employee's performance
Cafeteria Plan
allocates a certain amount of money to each employee that can be
spent on benefits
Discharge
termination of employment due to inappropriate work behavior
Layoff Temporarly
temporarty or permanent reduction in the number of employees due
to changing business conditions
Personal time
a few hours each month that can be scheduled for non-job activities
Family Leave
a policy which allows employees to take a leave of absense to care for
a sick family member, or for other personal emergencies for the birth
or adoption of a child
Flextime
allows employees some choice in how their work days and hours are
arranged
Job Sharing
offers one job to two people. Each person works a part-time schedule
Flex-Plan
some employees can complete part or all of their work away from the
business site.
Collective Bargaining
Formal negotiations between Unions and Management
2.03
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Extraction and Cultivation
A form of production in which products are obtained from nature or
grown using natural resources
Processing

A form of production which involves changing and improving the

form of another product.
Manufacturing products
A form of production which combines raw materials and processed
goods into finished
Manufacturing
Process Usually involves several businesses using products or raw
material to create other products to be used by customers
Manufacturing Procedures
The way manufacturers set up production to make their products
Mass Production
An assembly process that makes a large number of identical products
using a continuous, efficient procedere
Custom Manufacturing
Building a specific and unique product to meet the needs of one
customer.
Materials Processing
Changing the form of raw materials so the can be consumed or used
to make other products.
Continuous Processing
A form of materials processing in which raw materials constantly
move through specially designed equipment changing them into a
specific product useable for consumption or further manufacturing
Intermittent Processing
A form of materials processing which uses short production runs to
produce a precise amount of a variation of a product.
Product Planning
a two step process involving New Product Research and Product
Design
Inventory management
Maintains the supply of all resources needed for production and the
products produced.
Facilities Management
The type of business operation associated with a business's buildings
Logistics
Managing the acquisition, movement, and storage of supplies,
materials, and finished products in a business.

Scheduling
involves determining the activities that need to be completed, the
people who will complete the work, and the resources needed for the
task
Safety and Security
Protection of people and property.
Operational Plan
a tool for business operations which identifies how work will be done,
who will do it, and what resources will be needed.
Schedule
a time plan for completing activities
Standard
A specific measurement against which an activity or result is judged
2.04
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Management Information System (MIS)
an ordered system of processing and reporting information in an
organization
Components of MIS
1.Financial Information 2.Production and Inventory Information
3.Marketing and Sales Information 4. Human Resource Information
E-commerce (e for electronic)
refers to conducting business transactions over the internet or other
technology
Robotics
the use of mechanical devices programmed to do routine tasks, such
as those in many factories
Artificial Intelligence
software that enables computers to reason, learn, and make
decisions. It uses logical methods similar to the methods humans
use.
Expert Systems
Computer programs that help people solve technical problems
Computer-aided design (CAD)
the use of technology to create product styles and designs.

Telecommuting
involves the activities of a worker using a computer at home to do a
job instead of going to their employer's place of business
Business ethics
Rules about how businesses and their employees ought to behave.
Social responsibility
The duty of a business to contribute to the well-being of a
community.
Ethics
Principles of morality or rules of conduct.
Code of ethics
A set of rules for guiding the action of employees or members of an
organization.
Patent
The exclusive rights of an inventor to make, sell, and use a product or
process.
Trademark
A distinctive name, symbol, word, picture, or combination of these
that a company uses to identify products or services.
Copyright
Protection of the creative work of authors, composers, and artists.
Public utility
An organization that supplies a service or product vital to all people
including companies that provides local telephone service, water, and
electricity.
Nonrenewable resource
A natural resource that cannot be replaced
Monopoly
When a business has control of the market for a product or service.
Antitrust laws
Laws intended to prevent unfair business practices such as false
advertising, deceptive pricing, and misleading labeling.
Contract
An agreement to exchange goods or services for something of value,
usually money.
Social responsibility

refers to the duty of a busines to contribute to the wellbeing of a

community
Non-renewable
resource a natural resource that cannot be replaced when used up
Conservation
saving scarce natural resources
Pollution
occurs when the environment is tainted with the by-products of
human actions
EPA
Environmental Protection Agency enforces govt's measurable
standards for water and air quality
OSHA
Occupation Safety and Health Administration
Ethics
principals of morality or rules of conduct
Marketing the process of planning and executing the conception,
pricing, promotion, and distribution of ideas, goods, and services to
create exchanges that satisfy individual and organizational
objectives
...
Conflict of interest
can occur when an action by a company or individual results in an
unfair benefit
Interstate commerce
refers to business dealings involving companies in more than one
state (Regulated by the Federal Government)
Intrastate commerce
refers to business dealing involving companies that do business
within one state (Regulated by the State Government)
Marketing Strategy a company's plan to achieve its goals
...
Intellectual property
is purely intangible with no physical characteristics- no one can touch
it.
Copyright

protects the creative work of authors, composers, and artists

Public utility
an oranization that supplies a service or product vital to all people
Revenue
government income
Income taxes
Taxes levied on the income of individuals and corporations
Property tax
tax based on the value of property such as land and buildings
Sales tax
a state or local tax on goods and services that is collected by the seller
Government borrowing
gov't borrows money by selling bonds
Federal Trade Commission (FTC)
enforces antitrust laws
3.01
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Target Market
a specific group of consumers that have similar wants and needs
Marketing Mix
the blending of four marketing elements-product, distribution, price,
and promotion
Marketing Orientation
considers the needs of customers when developing a marketing mix
Final Consumers
persons who buy products and services mostly for their own use
Business Consumers
persons, companies, and organizations that buy products for the
operation of a business, for incorporation into other products and
services, or for resale to their customers
Consumer Decision-Making Process
the specific sequence of steps consumers follow to make a purchase
Buying Motives

the reasons consumers decide what products and services to

purchase
Marketing Research
finding solutions to problems through carefully designed studies
involving consumers
Product
everything a business offers to satisfy a customer's needs
Services
activities that are consumed at the same time they are produced
Intangible
have no physical form
Price
the money a customer must pay for a product or service
Markup
the amount added to the cost of a product to set the selling price
Encoding preparing the information to be communicated
...
Decoding
the receiver obtains the information from the channel and interprets
it for understanding
Distribution
the locations and methods used to make a product or service
available to the target market
Channel of Distribution
the route a product follows and the businesses involved in moving a
product from the producer to the final consumer
Promotion
any form of communication used to inform, persuade, or remind
Effective communication
the exchange of information so there is common understanding by all
participants
Personal selling
direct, individualized communication with prospective customers to
assess their needs with appropriate products and services eds and
assist them in satisfying those needs

Advertising
any paid form of communication through mass media directed at
identified consumers to provide information and influence their
actions
Channel Members
the businesses that take part in a channel of distribution
4.02
...
Are banks like businesses?
Banks are businesses because they sell services such as checking
accounts, saving accounts and loans. They want to earn revenues and
make profits.
Can anyone start a bank?
No, not everyone can start a bank. They have to meet federal and
government's state requirements. They take people's money so they
must be fair. Must have enough capital.
How can people start a bank?
People can start a bank, but they have to apply for charter from the
federal government. If they apply to their state and the charter is
granted, the bank will open as a state bank. If it is a charter from the
federal government it will operate as a national association (N.A).
Is government regulation of a bank necessary?
Yes, it is necessary because if a bank fails thousands of people will
loose money. The government has to regulate the banking laws to
assure the saftey of customers' money. State banks= state banking
laws and National banks= federal law
Deposit type institutions
accept deposits for people in the future. (main types: commercial,
s&l, mutual, credit union)
Commercial banks
Full service banks that offer a wide range of financial services. Bank
offer checking accounts, provide savings accounts, make loans to
individuals and to businesses, And offer other services. Have been
opened in supermarkets and offer everything!
Federal Deposit Insurance Corporation FDIC
Protects depositors money in case of failure... Insures all account in
same bank
Savings and Loans Association
Specalized in savings accounts and making loans for home mortages

Mutual Savings Bank

Provides a variety of services. It organized mainly savings accounts
and to make loans to home buyers. Owned by depositors
Credit union
Is a user-owed, not-for-profit, cooperative financial instution.
Usually formed by peeps in same company, church, community,etc.
Offer other services...(NCUA- insures depositors funds in case of
failure) like FDIC
Nondeposit financial institution
Refers to financial institution
Life insurance companies
People buy this to provide financial security for dependents. Offer
financial services and helps expand business in economy
Investment companies
Allow people to choose investment opportunity for long term growth
of their money.
Consumer finance company
Specializes in making loans for long lasting or durable goods and for
financial emergencies
Mortages companies
Provide loans for purchasing a home or restate
Check cashing companies
People who don't have banks may use for check cashing outlets to
cash paychecks
Pawnshops
Make loans based on tangible possessions
Accepting Deposits (Financial Services)
safe storage funds for the future. One of main services is they offer to
keep money for safe keeping.
Interest
the amount paid for the use of money
Transferring funds (Financial Services)
the ability to transfer to others is extremely important . Money in a
checking account can be accessed at any time, by writing a check and
this can be deposited in the account of the person who receives the
check
Electronic Funds Transfer (EFT)

a system through which funds are moved electronically from one

account to another and from one bank to another.
ATMs (Automatic Teller Machines
Home banking
Direct deposit
Point of sale transactions
Lending money
Safe Deposit Box
Investments