Study Guide - Valerie Bodden Kluge 10-0014 Chapter 1...

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Valerie Bodden Kluge 10-0014 Chapter 1 Efficiency and Effectiveness: Effectiveness (pg. 13) means producing the desired result, fulfilling the specific function. Efficiency (pg. 13) means producing goods and services using the least amount of input, (resourses) to earn a bigger profit. Revenue: total amount of money a business takes in during a given period by selling goods or services. Loss: occurs when a business’s expenses are more than its revenues. Risk: the chance an entrepreneur takes of losing time and money on a business that may not prove profitable. Standard of Living (pg. 5): refers to the amount of goods and services people can buy with the money they have. Quality of Life (pg. 5): refers to the general well-being of a society in terms of political freedom, a clean natural environment education, health care, safety, free time, and everything else that leads to satisfaction and joy. Stakeholders: all of the people who stand to gain or lose by the policies and activities of a business. (include: bank, suppliers, dealers, stockholders, employees, customers, people in the surrounding community, etc) Productivity (Pg. 13): the amount of output you generate given the amount of input. Chapter 2 Economics (pg.31): the study of how society chooses to employ resources to produce goods and services and distribute them fro consumption among various competing groups and individuals. Microeconomics: looks at the behavior of people and organizations in particular markets. Macroeconomics: looks at the operation of a nation’s economy as a whole. Thomas Carlyle: called economics the Dismal Science. Adam Smith: Believed people would work hard if they have incentives for doing so. He beieved people would work harder if they see incentives, especially economic, as a result, the economy would prosper as well, creating more jobs, good, and products. This he called the “invisible hand”. Which was Adam Smith’s book? Wealth of nations.
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Government Types: Socialism (pg.41) Socialism creates more social equity. Compared to workers in capitalist countries, workers in socialist countries not only receive more free education and health care benefits but also work fewer hours, have longer vacations, and receive more free benefits in general, such as child care. The major disadvantage of socialism is that it lowers the profits of owners and managers, thus cutting the incentive to start a business or to work hard. Socialist economies tend to have a higher unemployment rate and a slower growth rate than capitalist economies. Capitalism (pg. 35) The four basic rights under capitalism are (1) the right to private property, (2) the right to own a business and to keep all of that business's profits after taxes, (3) the right to freedom of competition, and (4) the right to freedom of choice. In capitalist countries, businesspeople decide what to produce; how much to pay workers; how much to charge for goods and services; whether to produce certain goods in their own countries,
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This note was uploaded on 08/09/2011 for the course BUS 101 taught by Professor Shindell during the Spring '09 term at Universidad Iberoamericana.

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Study Guide - Valerie Bodden Kluge 10-0014 Chapter 1...

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