U.S. Business Environment and Global Economics Quiz
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Questions and Answers

What is the main goal of U.S. business?

  • Ensuring equal distribution of wealth
  • Maximizing profits and shareholder value (correct)
  • Maintaining a steady employee retention rate
  • Minimizing costs at all times

    • How do external environments affect the success or failure of an organization?

  • They primarily impact employee satisfaction levels
  • They have no impact on the organization's success or failure
  • They only affect the organization's financial statements
  • They can influence customer behavior and market demand (correct)

    • What elements contribute to resource distribution in the United States economic system?

  • Government intervention and control of all resources
  • Collaborative resource allocation by all businesses
  • Private enterprise exclusivity in resource distribution
  • Markets, demand, and supply dynamics (correct)

    • How is the performance of an economic system evaluated?

    <p>By considering multiple factors such as GDP growth, employment rates, and income distribution</p> Signup and view all the answers

    What is the definition of profits in a business context?

    <p>The difference between a business's revenues and its expenses</p> Signup and view all the answers

    Which term refers to everything outside an organization’s boundaries that might affect it?

    <p>External Environment</p> Signup and view all the answers

    What is the system for allocating a nation's resources among its citizens, both individuals and organizations?

    <p>Economic System</p> Signup and view all the answers

    Which type of economy relies on a centralized government to control all or most factors of production and allocation decisions?

    <p>Planned Economy</p> Signup and view all the answers

    In which type of economy do individual producers and consumers control production and allocation by creating combinations of supply and demand?

    <p>Market Economy</p> Signup and view all the answers

    What is the process of converting government enterprises into privately owned companies called?

    <p>Privatization</p> Signup and view all the answers

    In a market economy, what does 'demand' refer to?

    <p>The willingness and ability of buyers to purchase goods or services</p> Signup and view all the answers

    'Supply' in a market economy refers to:

    <p>The willingness and ability of producers to offer goods or services for sale</p> Signup and view all the answers

    'Private property rights' in a private enterprise system refer to:

    <p>'Individual' ownership of resources used to create wealth</p> Signup and view all the answers

    'Freedom of choice' in a private enterprise system allows individuals to:

    <p>'Sell' their labor to any employer they choose</p> Signup and view all the answers

    'Profits' in a private enterprise system serve as a lure for some people to:

    <p>'Assume' the risks of entrepreneurship and pursue their own interests</p> Signup and view all the answers

    In a market economy, what occurs when two or more businesses vie for the same resources or customers?

    <p>Competition</p> Signup and view all the answers

    What is the difference between social responsibility and ethics?

    <p>Ethics are about the moral principles that guide a person's behavior, while social responsibility refers to the impact of an organization's decisions on society.</p> Signup and view all the answers

    How do individuals develop their personal codes of ethics?

    <p>By integrating their values, beliefs, and experiences to form a moral framework for decision-making.</p> Signup and view all the answers

    What are the four general approaches to social responsibility?

    <p>Legal, philanthropic, strategic, and ethical.</p> Signup and view all the answers

    How do issues of social responsibility and ethics affect small businesses?

    <p>Social responsibility and ethics can affect the reputation, customer trust, and success of small businesses.</p> Signup and view all the answers

    Which term refers to the standards of behavior that guide individual managers in their work?

    <p>Managerial ethics</p> Signup and view all the answers

    What is the overall way in which a business attempts to balance its commitments to relevant groups and individuals in its social environment called?

    <p>Social responsibility</p> Signup and view all the answers

    According to the Stakeholder Model of Responsibility, what do companies strive to be responsible to first and foremost?

    <p>Investors</p> Signup and view all the answers

    What does 'unethical behavior' refer to?

    <p>Behavior that does not conform to individual beliefs and social norms about what’s right and good</p> Signup and view all the answers

    What are two of the most common approaches to formalizing top management commitment to ethical business practices?

    <p>Instituting ethics programs and adopting written codes</p> Signup and view all the answers

    What is the process of making an ethical judgment based on the rightness or wrongness of a proposed activity or policy called?

    <p>Ethical judgment making</p> Signup and view all the answers

    What does 'ethics' refer to?

    <p>Beliefs about what is right and wrong or good and bad in actions that affect others</p> Signup and view all the answers

    'Social responsibility' refers to the overall way in which a business attempts to balance its commitments to which groups?

    <p>'Relevant groups and individuals in its social environment'</p> Signup and view all the answers

    'Business ethics' refers to ethical or unethical behaviors by employees in which context?

    <p>'Context of their jobs'</p> Signup and view all the answers

    'Managerial ethics' refers to standards of behavior that guide whom in their work?

    <p>Individual managers</p> Signup and view all the answers

    What do companies strive to be responsible to first and foremost according to the 'Stakeholder Model of Responsibility'?

    <p>Investors</p> Signup and view all the answers

    What are two of the most common approaches to formalizing top management commitment to ethical business practices?

    <p>Instituting ethics programs and adopting written codes</p> Signup and view all the answers

    Study Notes

    Business Goals and Environmental Influences

    • Main goal of U.S. business: To generate profits for its owners or stakeholders.
    • External Environments Affecting Businesses: Factors outside an organization's control can significantly impact its success or failure. These factors can include economic conditions, political climate, social trends, technological advancements, and competitive landscape.

    U.S. Economic System

    • Resource Distribution: The U.S. economic system relies on a market-based approach where resources are allocated based on supply and demand.
    • Factors of Production: Key resources include land, labor, capital, and entrepreneurship.
    • Economic Performance Evaluation: Measured through factors like GDP growth, unemployment rate, inflation, and productivity.

    Economic Systems

    • Command Economy: The government centrally controls resources and production, making all key economic decisions.
    • Market Economy: Based on the principles of supply and demand, where individual producers and consumers determine what is produced and consumed.
    • Privatization: The process of transferring government-owned enterprises to private ownership.

    Key Concepts in Private Enterprise Systems

    • Demand: Refers to the willingness and ability of buyers to purchase goods or services at various prices.
    • Supply: Refers to the willingness and ability of sellers to produce and offer goods or services for sale at various prices.
    • Private Property Rights: Individuals and organizations have the right to own and control their property, including land, buildings, and intellectual property.
    • Freedom of Choice: Individuals have the right to choose their occupations, employers, and purchases.
    • Profits: Serve as an incentive for businesses to innovate, expand, and create new products and services.

    Market Dynamics and Competition

    • Competition: When two or more businesses strive for the same resources or customers, leading to price pressures and market competition.

    Ethics and Social Responsibility

    • Social Responsibility: The overall way a business attempts to balance its commitments to various stakeholders, including employees, customers, investors, and the community.
    • Ethics: Standards of behavior that guide individuals in their personal and professional lives.
    • Personal Codes of Ethics: Developed through individual experiences, values, and beliefs.
    • Social Responsibility Approaches:
      • Economic Model: Focuses on maximizing profits.
      • Legal Model: Focuses on complying with legal requirements.
      • Ethical Model: Focuses on doing what is considered right and fair.
      • Philanthropic Model: Focuses on actively contributing to the community and social causes.
    • Ethics and Small Businesses: Small businesses are increasingly facing pressure to demonstrate ethical behavior and social responsibility.
    • Managerial Ethics: Standards of behavior that guide individual managers in their decision-making and actions.

    Stakeholder Model of Responsibility

    • Stakeholders: Individuals or groups that have a vested interest in the success of a business.
    • Stakeholder Model: Emphasizes the responsibility of companies to consider the well-being of all stakeholders, not just shareholders.
    • Unethical Behavior: Actions that violate ethical standards or legal requirements.
    • Formalizing Ethical Business Practices:
      • Codes of Ethics: Written documents outlining the company's ethical values and standards.
      • Ethics Training Programs: Provide employees with guidance and education on ethical decision-making.
    • Ethical Judgment: The process of evaluating the rightness or wrongness of a proposed action based on ethical principles.

    Key Definitions

    • Ethics: Standards of behavior based on what is right and wrong.
    • Social Responsibility: The overall way a business balances its commitments to stakeholders.
    • Business Ethics: Ethical or unethical behaviors by employees within the context of their work.
    • Managerial Ethics: Standards of behavior that guide managers in their work.
    • Stakeholder Model of Responsibility: A model emphasizing the responsibility of companies to stakeholders.

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    Description

    Test your knowledge on the nature of U.S. business, its main goals and functions, the external environments affecting business success, and the different types of global economic systems. This quiz is based on Chapter One of Business Essentials 9e Ebert/Griffin.

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