Term
| What is the relationship of businesses' profit to risk assumption? |
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Definition
Profit is money a business earns above and beyond the money that it spends for salaries and other expenses.
Businesspeople make profits by taking risks. Risk is the chance an entrepreneuer takes of losing time and money on a business that may not prove profitable.
A loss occurs when a business's costs and expenses are higher than its revenues. |
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Term
| Who are stakeholders, and which stakeholders are most important to a business? |
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Definition
Stakeholders include customers, employees, stockholders, suppliers, dealers, bankers, the media, people in the local community, environmentalists, and elected government leaders.
The goal of business leaders is to try to recognize and respond to the needs of these stakeholders and still make a profit. |
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Term
| What are the advantages and disadvantages of entrepreneurship? |
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Definition
| Working for others means getting benefits like paid vacations and health insurance. Entrepreneurs take more risks and lose those benefits. They gain the freedom to make their own decisions, more opportunity, and possible wealth. |
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Term
| What are the five factors of production? |
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Definition
1. Land
2. Labor
3. Capital
4. Entrepreneurship
5. Knowledge
The most important are entrepreneurship and knowledge. Entrepreneurs are people who risk time and money to start and manage a business. What makes rich countries rich today is a combination of entrepreneurship and the effective use of knowledge. |
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Term
| What can governments in developing countries do to reduce the risk of starting a business and thus help entrepreneurs? |
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Definition
| The government may allow private ownership of businesses, pass laws that enable businesspeople to write contracts that are enforceable in court, establish a currency that's tradable in world markets, help to lessen corruption in business and government, and keep taxes and regulations to a minimum. From a business perspective, lower taxes mean lower risks, more growth, and thus more money for workers and the government. |
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Term
| How has technology benefited workers, businesses, and consumers? |
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Definition
| Technology enables workers to be more effective, efficient, and productive. Effectiveness means doing the right thing in the right way. Efficiency means producing items using the least amount of resources. Productivity is the amount of output you generate given the amount of input (e.g., hours worked). |
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Term
| What are some ways in which businesses meet and beat competition? |
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Definition
| Some companies have found a competitive edge by focusing on making high-quality products, all the way to zero defects. Companies also aim to exceed customer expectations. Often that means empowering frontline workers by giving them more training and more responsibility and authority. |
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Term
| How have social changes affected businesses? |
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Definition
Diversity has come to mean much more than recruiting and keeping minority and female employees. Diversity efforts now include seniors, disabled people, homosexuals, atheists, extroverts, introverts, married people, singles and the devout. It also means dealing sensitively with workers and cultures around the world.
Providing social security benefits to senior citizens in the future will draw huge amounts of money from the working population. That is why there is so much discussion about Social Security in the media today. |
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Term
| Which countries are creating the greatest challenges? |
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Definition
| China and India are two major competitors. |
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Term
| What will be the impacts of future wars and terrorism? |
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Definition
| Some businesses, such as those in the defense industry, may prosper. Others, such as tourism, may suffer. One way to minimize world tensions is to help less developed countries to become more prosperous. |
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Term
| What is the history of our economic development in he United States and what does it tell us about the future? |
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Definition
Agricultural workers displaced by improved farm technology went to work in factories. Improved manufacturing productivity and increased competition from foreign firms contributed to the development of a service economy in the United States. The service era is now giving way to an information-based global revolution that will affect all sectors of the economy.
The secret to long-term success in such an economy is flexibility and continuing education to be prepared for the opportunities that are sure to arise. |
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