Business Exam Review | Answers Correctly Marked | Already Graded A+

Document Content and Description Below

Business Exam Review Definitions: Economic Basics: Capital Resources- A resource such as equipment, a building, or money, that is used to produce goods and services. Consumer Purchasing Po... wer- When consumers have the power to choose where they will buy goods and services, and how much they will pay for them. Demand- The quantity of a good or service that consumers are willing and able to buy. Economic System- The way business and government work together to provide goods and services to consumers. Entrepreneur- A person who takes risks and starts a venture to solve a problem or take advantage of an opportunity; a person who provides an innovative product of service to meet a consumer want or need. Expenses- Expenditures that help a business generate revenue; assets that are consumed in the process of generating revenue. Human Resources- People who work to produce goods and services in a business; also known as workforce or labor. Interdependent- Being dependent on others for a good or service. Law of Demand- The economic principle that demand goes up when price comes down, and comes down when price goes up. Law of Supply- The economic principle that supply goes up when prices go up, and comes down when prices come down. Natural Resources- Those raw materials that we get from the earth, the water, and the air. Non-Profit Organization- An organization, often a charitable organization, that does not seek to make a profit from the organization of the business and raises funds for a specific goal. Profit- The reward that an owner receives for taking risks. Is it the money left over from sales after the costs and expenses of operating a business have been paid? Supply- The quantity of a good or service that producers can provide, determined by the costs of producing it and by the price people are willing to pay for it. Questions: 1. Construct a supply and demand graph. 2. What is law of Demand and supply. Law of Demand - The economic principle that demand goes up when prices go down, and that demand goes down when prices go up. Law of Supply - The economic principle that supply goes up when prices go up, and comes down when prices come down. 3. Identify and explain the factors that increase or decrease demand. • Changing consumer income: As income increases, people tend to buy more than before. • Changing consumer tastes: Example: If an item is perceived as fashionable, demand may increase. If its deemed unfashionable, demand will decrease. • Changing expectations for the future: If consumers anticipate that prices or income will change in the future, they will often purchase more. If consumers expect prices or income to decrease, demand will also increase. • Changes in population: An increase in population means that more goods and services are needed. A decrease in population means that less goods and services are needed. 4. Identify and explain the factors that increase or decrease supply. • Change in the number of producers: Business always produce goods that attract profit. As the demand for an item increase, more business will start producing the item. • Changes in price: If the price of a good decreases, then people may stop producing it. – • Changes in technology: This can reduce the cost of production, and it encourages more businesses to start producing a product. This increase supplies. • Changing expectations for the future: Producers must plan ahead to forecast sales, production, financing, and marketing. Many producers try to predict economic conditions and consumer demand for two to five years in advance. • Changing production costs: If the production becomes more expensive, then the supply will decrease. Vice versa. 5. Distinguish between surplus and shortage. Surplus - More supply than demand. Shortage - More demand than supply. 6. What does the decision-making process involve. • Define the decision that has to be made • Identify the alternatives. • Evaluate the alternatives. • Make a decision and take action. • Evaluate the decision. Types of businesses: Definitions: General partnership: 2 or more individuals agreeing to share a business. Private Corporation: shares are not available to public. Limited Liability- A restriction on the extent to which the shareholders of a corporation are personally responsible for its debts, limiting their liability to the amount they originally invested. Revenue- The money a business receives for the products and/or services it sells or from its investments. Share- A unit of ownership in a corporation. Dividend- The part of a corporation's profit after taxes that each shareholder receives. Merger- A merger occurs when two or more companies join together, either because one has purchased a controlling interest in the other or because the companies have combined their interests. Shareholders- An owner of shares in a company. E-commerce- Commercial transactions conducted electronically on the internet. Offshoring- The practice of basing some of a company's processes or services overseas, so as to take advantage of lower costs. Sole proprietorship: one owner of a business. Partnership- A business or firm owned and run by two or more partners. Strategic Alliance - An agreement between businesses to commit resources to achieve a common set of objectives. Franchisee- A person who runs a franchise operation and is under contract, or licensing agreement, with the franchiser. Franchisor- The parent company who grants the franchise and provides goods and/or services to the franchisees. Multinational Corporations- A business operating in or involving or involving several nations. A.K.A transnational. Questions: 1. What are some sources of start-up money for a sole proprietor? The owner’s savings, friends, family, or from a bank loan. 2. What role does a board of directors serve within a corporation? A group of individuals who run a corporation or cooperative and make individuals who run a corporation or co-operative and make decisions on the behalf of the shareholders. 3. What is the principal motive of starting a cooperative? For service, not profit. 4. Identify the 4 types of businesses Service Business: - Generates a profit by doing something for other businesses or consumers -Examples include carpet cleaners, cable companies, restaurants and theatres Retail Business: -Generates a profit by selling things-Usually buys items from a producer and sells them to a consumer -Sometimes referred to as a distributor. Not-for-profit organization: -Different from other types because the organization does not generate a profit-Purpose is to meet specific needs of the community-Examples include charities and housing co-operatives Manufacturing business: -Generates a profit by producing products from raw materials or component parts and then selling them to consumers or distributors 5. Identify the 5 different forms of businesses 1. Sole Proprietorship: • A business owned by one person who is known as the proprietor • Funds come from owner’s savings, friends, family, or a bank loan• Business income is declared on the owner’s personal income tax rather than filing a separate business tax form • Owner receives all profits and is responsible for any losses (unlimited liability) • Cheapest and easiest 2. Partnership: • A partnership is a business in which two or more individuals share the costs and responsibilities of owning and operating it • Terms are recorded in the partnership agreement • Two types of partnerships:• General Partnership: All partners have unlimited liability for the firm’s debts• Limited Partnership: The partners are only responsible for the funds they both invested in the initial business. This is called limited liability• The working relationship between partners can be an advantage is they have complimentary talents and share in decision making 3. Corporation: • A corporation is a business granted legal status with rights, privileges, and liabilities that are distinct from those of the people who work for the business.• Corporations can be small (one-person) or large (multinational) which conducts business in several different countries. • In order to get funds, usually divide the corporation’s ownership into small arts called stocks or shares. Shareholders have limited liability.• If the corporation loses money, investors only lose the amount invested. If the corporation makes a profit, it can be reinvested and/or paid out to shareholders in the form of dividends. Shareholder dividend = Total profit paid out ÷ Total number of shares x Number of shares owned by the shareholder• A board of directors runs a corporation that is owned by shareholders. 4. Co-operative: • Owned by the workers or members who buy the products or use the services that the business offers (members are the board of directors).• Motivated by the service, not the profit. • Regardless of the number of shares owned, each member has only one vote. • Prots are distributed according to how much each member spends. 5. Franchise: • A franchise is a combination, or hybrid, of the four forms of ownership. The main difference between that anyone can open a new location.• The franchiser licenses the rights to its name, operating procedure, designs, and business expertise to another business called the franchisee. • A franchise agreement provides the business with: • A ready-made, full operational business• Brand recognition that is appealing to consumers. • Requirements may include: • Paying the franchise fee.• Agreeing to pay a monthly percentage fee of total sales and advertising costs. • Purchasing all supplies centrally from the franchiser.• Participating in franchiser standards training. 6. What questions do people thinking of starting a business ask themselves? P 50 - 60 What types of businesses are most likely to succeed for my business idea? Should I start an e- business or a traditional brick and mortar business? What type of ownership should my business be?Should my business be home based? What are the startup costs?How will I finance my business? What level of risk should I expect? 7. Why is forecasting a critical step in the process of running a business? Forecasting is a critical step is it prevents errors, and can increase profit. For example, if a company expects an item to go obsolete, they may stop production early to save money. 8. Distinguish the difference between a merger and a strategic alliance A merger is a agreement which turns two existing companies into one. A strategic alliance is when two companies decide to share resources to undertake a similar project. 9. What are some consequences to an offshore move for a business? If the country they are going to has an unstable political climate or their currency is unstable the move may be more costly than beneficial. Trade barriers also act as a risk. Chapter 3: Business Ethics + Social Responsibility Definitions: Accounting Scandal - A publicly exposed crime involving accountants or senior executives who alter accounting records for personal benefits. Ethical dilemma- A moral problem which choice between potential right and wrong answers. Insider trading- Illegal buying or selling of shares of a company based on confidential information that is not available to the public. Ethics- The principles of morality and proper conduct that people and businesses use to guide their behavior. Code of ethics - A document that describes specifically how companies and employees should respond to different situations. Fraud- The crime of lying or pretending. Morals- A rule used to describe what is good or bad. Corporate social responsibility- Conducting business in a way that is line with society's values. Pay equity- Equal pay for work of equal value. Duty to report- An obligation to disclose all important information. Values- A personal or corporate belief about what is important. Harassment- Making a particular person or group feel uncomfortable in a work situation because of race, religion, gender, etc. Whistleblower- An employee who makes the decision to inform officials or the public about a legal or ethical violation. Questions: 1. How Can a business communicate its ethics and values to its employees, customers and owners? A code of ethics specifically tells employees how to respond in situations related to ethics and values. 2. Is insider trading illegal? Explain. Yes. It is illegal because it gives them the advantage over all other investors. 3. CSR represents what? Corporate Social Responsibility. Helps businesses to provide goods and services in line with society's values. 4. What are the 6 principles that CSR follow? . 1) Providing a safe and healthy work environment. . 2) Adopting fair labor policies. . 3) Protecting the environment. . 4) Being truthful in advertising. . 5) Avoiding price discrimination. . 6) Donating to charity. 5. Explain glass ceiling and gender discrimination Glass ceiling is an invisible barrier which prevents people from approaching new leadership positions, women, the disabled, or people of a visible minority are often affected by this. Gender discrimination is an employee being treated differently because of their gender. 6. Review the laws that govern corporate ethics . 1) Workplace safety . 2) Anti-discrimination issues . 3) Harassment . 4) Accessibility issues . 5) Environmental responsibility . 6) Labor practices International Businesses: Definitions: Global economy- The exchange of goods and services among people in different countries throughout the world. Global product- A standardized item offered in the same form in all the countries in which it is sold. Offshore Outsourcing- The relocation of some of a company's operations to another country. Sustainable development- A process of developing land, cities, businesses, and community that meets the needs of the present without compromising the needs of future generations. Environmental degradation- The consumption of natural resources faster than nature can replenish them. Tariff- A list or schedule of the percent of the product price to be changed as customs duty. Trade agreement - An agreement between countries to allow goods and services to flow more freely across their borders. Questions: 1. Distinguish the difference between a domestic and international transaction Domestic transaction- A transaction in which the production and sale of an item occur within the same country. International transaction- A transaction in which the production and sale of an item occur within different countries. 2. How do currency fluctuations affect a business? Describe. Fluctuating currencies have a huge impact on doing business internationally. Spending extra money based on conversions is not appealing to businesses. 3. Distinguish the difference between imports and exports. What role does each play in international business? An import is bringing a good or service from abroad for sale. An export sends a good or service to abroad for sale. Imports and exports contribute to the global economy. Production: Definitions: Primary industries: Ingredients- The raw materials that go into a product. Supplies- The raw materials used in the running of a business that do not go into the product. Processing- Converter raw materials into products. Automation- The process of work being done by a machine. Outsourcing- The practice of subcontracting work to other companies. Capital - wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing. Quality Control: a system to maintain standards by testing samples of products. Grading: The process of judging a product. Questions: 1. Describe the factors of production. What are they? 1) Natural resources- 6 different types. A primary industry. 2) Raw Materials- and goods used in the manufacturing of other goods. 3) Labor- includes all physical and mental work needed to products goods/services. 4) Capital- the money invested in a business. There is liquid and non-liquid capital. Liquid capital is cash, stocks, bonds (easy to change/spend). Non-liquid capital is buildings, equipment, talents etc. 5) Information- to product goods and services, information is needed. Information is very important. 6) Management- people who control the factors of production. Allocates the company’s resources and decides what to purchase. 2. Natural resources include what six [6] examples? Agriculture, water, logging and forestry, fuel and energy, fishing and trapping, and mining. 3. The production process includes what four [4] stages? Describe each. 1) Purchasing- Buying raw materials, supplies, ingredients which are used to manufacture products. Purchasers are responsible for quality, price and additional costs. 2) Processing- Transforming/converting raw materials into semi of finished goods. 3) Quality Control- Satisfy standards of excellence outlined by company, government, or independent association. 4) Grading- Checking final product for size and quality against fixed standards. This allows customers to make informed decisions. 4. How may an organization improve productivity? Describe each suggestion. 1) Training- training programs are essential for improving productivity. 2) Capital Investment- spending money for equipment, or to improve a business increases productivity. 3) Investment in Technology- newer, better technology increases productivity. 4) New Inventory Systems- Such as J.I.T make production faster 5. How is productivity measured? If a worker can do the same amount of work in less time, same amount of work in equal time, or more work in less/equal time. Human Resources: Questions: 1. What are the functions of human resources? Human resources are people who work to provide goods and services in a business, also known as workforce or labor. 2. Distinguish among the various forms of compensation There are 9 total forms of compensation. . 1) Hourly Wage . 2) Salary . 3) Salary Plus Commission . 4) Straight Commission . 5) Incentive Bonus . 6) Performance Based Pay . 7) Fee for Service . 8) Royalty or Licensing Fee . 9) Stock Options 3. How is compensation calculated: 4. How to we calculate someone’s pay when paid hourly? Consider overtime pay. Up to 44 hours = Hourly Rate x Hours Worked Over 44 hours = Hourly Rate x 1.5 x Hours Worked 5. Distinguish among the various employability skills. Positive attitude, communication, teamwork, self-management, thinking skills, resilience. 6.. What rights exist in the workplace? i.e. employee vs. employer Rights of the Employee: -the minimum wage for employment -hours of work Financial Literacy Questions: . Explain the purpose of a budget. What components does a budget include? A budget important to understand where your money is coming from and where it is going. A budget includes fixed and variable expenses. . How can someone track their expenses? People can track their expenses by using an income statement. Through an income statement, you can track your fixed and variable expenses, as well as other expenses. . Distinguish the difference between fixed and variable expenses. A fixed expense is one that does not change each period. Ex- rent. A variable expense is one that can change depending on the period. Ex- food. . Understand how to complete a Budget. – review worksheet completed in class A budget helps you to understand where money is coming from, and where it is going. A budget sheet is important to keep track of information and it prevents overspending. In a budget sheet, you must make 3 columns; budget, actual and difference. This way, you make a budget for a period of time. Then you compare your budget to what you actually spent. 5. What does invest mean? Using savings to earn extra income. 6. Why do people invest? Investments often yield a higher rate of return then savings, and investments can grow at or exceed the rate of inflation. 7. What investment strategies did your teacher share with you? -Canada Savings Bond: represents a loan made by you to the government of canada. They pay back with interest. -Corporate Bonds: Same as CSB but for businesses. -Investing in Stocks: Buying a share in a company. -Common Stock: Like a normal stock but you get to influence company policy. -Preferred Stock: Dividends paid at a preferred rate, usually higher yield, less risk. -Mutual Funds: Pool of money from many investors that is set up and managed by an investment company. 8. What relationship exists between risk and return? Higher potential of return, high risk. And vice versa. 9. What is diversification? A corporate strategy to enter into a new market or industry in which the business does not currently operate. This creates a new product for the market. 10. Distinguish the difference between debt and deficit. Debt: The amount owed for funds that were borrowed. Deficit: Using more money than made. Money spent > Money made. Chapter 10 + 11: Entrepreneurship 1. Distinguish between the various entrepreneurial characteristics and skills. You should be able to describe / define each – providing examples of how they are used. Risk Taker: Must be willing to take high risks. This is because business is not a “sure thing” and everything involves risk. Perceptive: Cannot avoid problems. When faced with problems, they think of them as opportunities or challenges. Curious: They like to know how things work. Curiosity always leads to good things. Imaginative: They are creative. They imagine solutions to problems and work on it right away. They generate ideas and products. Persistent: New products are not always successful, they are required to try and try again. Goal- Setting: Success if not enough. They are always trying to reach new heights. Some others are being hardworking, self-confident, flexible, independent. Some entrepreneurial skills are research skills, management skills, and customer relationships. 2. Distinguish the difference between an invention and an innovation. P. 343 + 350 Invention: A product or process that does something that has never been done before. When this product of process fills a need, it sets the stage for entrepreneurship.Innovation: New technology, materials, or processes to improve existing products or how they are produced and distributed. Other: Business Cycle: [Show More]

Last updated: 2 years ago

Preview 1 out of 16 pages