BUSINESS 24_25 REVIEW for High-Level Assessment Exam #2 PDF

**[Unit 1: Characteristics and Functions of Business]** **[Unit 1-8 Competition]** 1. **Why is it important to know what your competition is doing and how they operate? ​** - It is important to conduct competitive analysis to understand the competitive landscape, challenges, th...

**[Unit 1: Characteristics and Functions of Business]** **[Unit 1-8 Competition]** 1. **Why is it important to know what your competition is doing and how they operate? ​** - It is important to conduct competitive analysis to understand the competitive landscape, challenges, threats, and opportunities in the market. ​ This analysis helps in defining what makes a business unique, positioning the brand, and creating strategies to grow and build market share. 2. **What is included in a competitive analysis? ​** - A competitive analysis involves gathering information about direct competitors, their products/services, target markets, annual sales, market share, marketing strategies, strengths and weaknesses, threats they pose, and types of media they use for advertising. ​ 3. **Compare and contrast the various types of competition. ​** - The document discusses direct competition, where companies offer essentially the same product or service (e.g., Coke versus Pepsi), and indirect competition, where products or services may satisfy the same need but are not the same (e.g., Greyhound Bus versus Delta Airlines). ​ It also mentions new entries, bargaining power of suppliers, and bargaining power of buyers as additional competitive forces. ​ 4. **What is the difference between direct and indirect competition? ​** - Direct competition involves companies offering essentially the same product or service, while indirect competition occurs when products or services are different but could satisfy the same need. ​ 5. **What is the difference between price and non-price competition? ​** - Price competition involves using pricing to attract customers, while non-price competition focuses on attracting customers based on features and attributes other than pricing. ​ 6. **How do consumers and society as a whole benefit from competition? ​** - Competition leads to lower prices, increased product quality, variety, and innovation. ​ It motivates companies to improve offerings, provide better value, and develop innovative solutions, benefiting consumers with lower prices, higher quality products, and access to cutting-edge technologies. ​ 7. **How does private enterprise drive the need for competition, and vice versa?** - Private enterprise, driven by a profit motive, creates economic value through innovation. Competition flourishes in a healthy capitalist system, leading to more options for consumers, lower prices, and continuous innovation. ​ Competition drives companies to improve, offer better value, and develop innovative solutions to meet consumer needs. 8. **How is the government involved in ensuring fair competition practices? ​** - The government plays a role in regulating businesses, promoting fair competition, and protecting consumers. ​ Antitrust laws, such as the Sherman Antitrust Act, Clayton Act, and Federal Trade Commission Act, exist to ensure businesses operate efficiently, keep prices down, and maintain quality standards. ​ The government monitors and enforces fair competition practices, intervenes to prevent monopolies, and regulates business activities to protect consumers, employees, shareholders, and other businesses. ​ 9. **What are some ways to go about collecting competitive information? ​** - Competitive information can be collected through primary and secondary data sources. ​ Primary data involves collecting information directly from first-hand experience, such as customer interviews, questionnaires, and price surveys. ​ Secondary data is information that has already been collected from other sources, like industry publications, press releases, news stories, and public companies' annual reports. ​ Conducting market research, analyzing industry trends, monitoring competitors\' activities, and utilizing tools like surveys, focus groups, and online research are common methods to gather competitive information. 1. **Capitalism:** An economic system where companies are privately-owned, versus being owned by the government, and that assumes companies are built with a purpose of creating economic value through innovation, driven by a profit-motive, and where prices are set by the market via the ebb and flow of supply and demand. 1. **Competition:** The rivalry between companies selling similar products and services. 1. **Direct Competition**:  When companies offer essentially the same product or service, i.e. Coke and Pepsi, Ford and GM. 1. **Indirect Competition**:  When products or services are not the same, but they could satisfy the same need, i.e. bicycles are indirect competition to automobiles. 1. **Monopolistic Competition**: A market where there are many suppliers, and barriers to entry are low, but suppliers try to differentiate their products and gain some price advantage. 1. **Monopoly**:  A market where one company controls the supply of a good or service, where other options for consumers aren\'t readily available, and where the barriers to entry for other companies are highly restrictive. 1. **Non-price Competition:** Competing to attract customers based on features and attributes other than pricing. 1. **Oligopoly**:  A market where a small number of companies control the supply of a good or service, and where the barriers to entry for other companies are highly restrictive. 1. **Price Competition:** Uses pricing to attract customers. 1. **Primary Data**:  Information that you collect directly from first-hand experience. 1. **Pure Competition**:  A market where a large number of companies provide essentially the same product and sell it at a similar price or the same price, and barriers to entry for new entrants are low. 1. **Regulated Monopolies:** Allowed under strict supervision, when the government believes a large entity, like a utility company, can provide services more efficiently and more cost effectively than multiple smaller ones. 1. **Secondary Data**:  Information that has already been collected from other sources. **[Current Business and Technology Trends]** **Glossary Terms:** **Ambient Intelligence: When many objects are connected and act in unison.** **Artificial Intelligence: The ability of a computer program or machine to think and learn, and to emulate or match what human beings do, like reasoning and making decisions** **Business Trend: A general change in the way business is developing.** **HTML (Hyper Text Markup Language): HTML is the standard markup language for creating web pages.** **Imports and Exports: Items shipped into and out of the country.** **Internet of Things (IoT): A network of devices connected to the internet that identify themselves, and communicate between other internet-enabled devices and systems.** **Leverage: Leverage is either an action used to gain an advantage, or some form of borrowed capital in an attempt to increase the potential ROI.** **Machine Learning (ML): A way of achieving artificial intelligence; a way for machines to receive information, and make decisions based on it.** **Return on Investment (ROI): ROI measures the gain or loss generated on an investment, compared to the amount of money invested; ROI is usually expressed as a percentage.** **Trend: A general change or movement; a prevailing tendency; a current style or preference.** 1. **What are current business trends? ​** - Current business trends include more people pursuing roles like entrepreneurs, solopreneurs, and intrapreneurs. ​ Marketers are starting businesses to impact growth, entrepreneurs are focusing on revenue generation by solving problems, and politicians are using social media for advertising. ​ Changes in demographics, immigration, internet, and social networks are influencing business strategies. ​ Technology trends like Cryptocurrency, Virtual Reality, Augmented Reality, streaming services, and Artificial Intelligence are rapidly impacting businesses globally. ​ 2. **What are current technology trends affecting business? ​** - Technology trends affecting businesses include Cryptocurrency, Virtual Reality, Augmented Reality, streaming services, Artificial Intelligence, and the Internet of Things (IoT). ​ These technologies are reshaping industries, influencing consumer behavior, and changing how businesses operate and interact with customers. ​ Companies are leveraging technology to enhance customer experiences, improve efficiency, and drive innovation in products and services. 3. **How do trends create opportunities for business ventures? ​** - Trends create opportunities for business ventures by opening up new markets, enabling innovative solutions, and driving consumer demand for products and services. ​ Businesses can capitalize on trends by adapting their strategies, developing unique offerings, and leveraging technology to meet evolving customer needs. ​ Identifying and aligning with current trends allows businesses to stay competitive, attract customers, and drive growth in dynamic market environments. ​ **[Unit 1-10 Types of Business Ownerships]** 1. Glossary Terms: 1. **Sole Proprietorship:** - **Advantages:** - Easy to start and manage. - Full control over decision-making. - Direct profits to the owner. - Minimal regulatory requirements. - **Disadvantages:** - Unlimited personal liability. ​ - Limited access to capital. - Sole responsibility for debts and losses. - Lack of continuity in case of owner\'s absence. 2. **Partnership:** - **Advantages:** - Shared decision-making and workload. ​ - Access to more capital and resources. - Shared risks and responsibilities. - Tax benefits through pass-through taxation. - **Disadvantages:** - Unlimited liability for general partners. ​ - Potential conflicts between partners. - Shared profits and decision-making. - Limited life span due to partner changes. 3. **Limited Liability Company (LLC):** ​ - **Advantages:** - Limited liability protection for owners. ​ - Flexible management structure. - Pass-through taxation. - Less formalities compared to corporations. - **Disadvantages:** - More complex than sole proprietorship or partnership. - Limited life span based on operating agreement. - Potential for disputes among members. - Restrictions on ownership transfer. 4. **Corporation:** - **Advantages:** - Limited liability for shareholders. ​ - Perpetual existence regardless of ownership changes. - Easier access to capital through stock offerings. - Separate legal entity from owners. - **Disadvantages:** - Double taxation on profits. ​ - More complex and costly to establish and maintain. - Stricter regulatory requirements. - Shareholder influence on decision-making. Each type of business ownership structure offers unique benefits and drawbacks, catering to different business needs, goals, and preferences. ​ It is essential for entrepreneurs to carefully consider these factors when choosing the most suitable ownership structure for their business venture. **[Unit 2-1 Economic Concepts]** 1. **Glossary Terms:** **Capital Goods: The physical assets used to produce goods and services, including machinery, equipment, buildings, and tools.** **Consumer: One who actually uses the product or service (also called the final user, or final customer).** **Consumption: The using of goods and services by people or by the economy in general.** **Deflation: The decrease in the general level of prices in an economy.** **Distribution: To categorize, sort, and transport goods to all their final destinations as efficiently, inexpensively, and carefully as possible.** **Economic Good: A good or service that has a benefit (or utility) to society, has value and therefore can be traded and exchanged using money, and has some degree of scarcity.** **Economic Utility: Something's usefulness and the degree to which wants are satisfied.** **Economic Want: Desire for goods, services or intangible items that can only be acquired by spending money -- items like a car, or a haircut, or a patent.** **Economics: Economics is the study of how individuals and societies make decisions about resources, production, distribution, exchange, and consumption of goods and services, given unlimited and competing wants, and given the scarcity of resources.** **Economizing: Reducing the amount of money spent in order to save money.** **Inflation: The increase in the general level of prices in an economy.** **Macroeconomics: The study of the behavior, performance, structure, and decision-making of an economy as a whole.** **Microeconomics: The study of behavior and decision-making of individuals and businesses in an economy.** **Natural Resources: Materials and substances found in nature that are used for economic gain, including air, water, sun, fertile land, plants, timber, fossil fuels, and minerals.** **Noneconomic Want: Desires that don't require money to be obtained, like talking to a friend.** **Opportunity Cost: The loss of potential gain from among other alternatives, when one alternative is chosen.** **Production: The making of products from raw materials and other inputs like labor, machinery, and tools.** **Resources: All the components needed for production including natural resources, labor, capital goods, and expertise.** **Scarcity: The reality that people's wants always exceed the resources available to fulfill those wants.** **Total Consumption: The total amount of goods and services used by an economy.** **Trade-off: Choosing between two things that can't be had or done at the same time; so it's giving up something you want in exchange for something else you want, often as a compromise.** 1. **What are the primary economic activities?** - The primary economic activities include production, distribution, exchange, and consumption of goods and services. ​ These activities involve the creation, movement, trade, and utilization of resources to satisfy human needs and wants. ​ 2. **What are the 3 basic questions all economic systems are trying to solve for? ​** - All economic systems aim to address three fundamental questions: what to produce, how to produce, and for whom to produce. ​ These questions revolve around resource allocation, production methods, and distribution of goods and services to meet the needs of society. ​ 3. **What are economic and noneconomic wants? ​** - Economic wants are desires for goods, services, or intangible items that require spending money to acquire, such as cars, vacations, or electronics. ​ Noneconomic wants are desires that do not involve monetary transactions, like spending time with friends or enjoying nature. ​ 4. **What gives money value in a private enterprise system?** - In a private enterprise system, money gains value through its function as a medium of exchange, unit of account, and store of value. Money facilitates transactions, serves as a measure of value, and retains its worth over time, enabling economic activities. ​ 5. **What are the various forms of economic utility? ​** - Economic utility comes in different forms: - Form utility: enhancing a product\'s usefulness by changing its form or appearance. - Task utility: improving services to meet specific needs or tasks. - Time utility: providing products or services at the right time for consumers. ​ - Place utility: making goods available at convenient locations for customers. - Possession utility: creating value by transferring ownership of products to consumers. 6. **What is scarcity and how does it affect economic decisions? ​** - Scarcity refers to the condition where human wants exceed the limited resources available to fulfill those wants. ​ Scarcity necessitates choices and trade-offs in resource allocation, influencing economic decisions on what to produce, how to produce, and for whom to produce. ​ 7. **What is a trade-off and how is it used in decision making? ​** - A trade-off involves choosing between two alternatives where selecting one option means giving up something else. ​ Trade-offs are essential in decision-making as individuals and businesses weigh the costs and benefits of different choices to allocate resources effectively. ​ 8. **What is opportunity cost and how is the concept useful in decision making? ​** - Opportunity cost is the value of the next best alternative forgone when a decision is made. ​ Understanding opportunity cost helps in evaluating trade-offs, making informed choices, and assessing the true cost of decisions by considering the benefits lost from choosing one option over another. **[Unit 2-2 Principles of Supply and Demand]** 1. **Glossary Terms** 2. **How and why are supply and demand significant factors in business decisions?** a. Supply and demand play a crucial role in business decisions as they determine the prices of goods and services, influence production levels, impact revenue and profitability, guide marketing strategies, and help businesses understand consumer preferences and market trends. ​ 3. **How does the free market and capitalism affect supply and demand? ​** b. In a free market system driven by capitalism, supply and demand interact to establish equilibrium prices. ​ Businesses respond to consumer demand by adjusting production levels and pricing, while competition in the free market influences supply and demand dynamics. ​ 4. **What factors affect and/or influence supply and demand? ​** c. Various factors influence supply and demand, including consumer preferences, changes in income levels, market competition, technological advancements, government policies, external shocks like natural disasters, and global economic conditions. ​ 5. **How does the law of supply and demand affect business decisions? ​** d. The law of supply and demand dictates that as prices rise, the quantity supplied increases, while the quantity demanded decreases, and vice versa. ​ Businesses use this principle to set prices, determine production levels, manage inventory, and respond to changing market conditions. 6. **What is the government\'s role in affecting supply and demand?** e. The government can impact supply and demand through regulations, taxes, subsidies, trade policies, and monetary measures. Government interventions can influence market equilibrium, consumer behavior, industry competition, and overall economic stability. 7. **How does price elasticity affect business decisions? ​** f. Price elasticity measures the responsiveness of demand to price changes. ​ Businesses use price elasticity to adjust pricing strategies, forecast sales, assess product demand, optimize revenue, and make informed decisions on pricing adjustments and promotions. 8. **What is equilibrium and equilibrium price and how do they affect business decisions?** g. Equilibrium is the point where supply equals demand, determining the equilibrium price at which goods are bought and sold. ​ Businesses use equilibrium and equilibrium price to set optimal pricing, manage inventory levels, forecast demand, and make strategic decisions to maximize profits and market share. 9. **How are surpluses and shortages managed?** h. Surpluses occur when the quantity supplied exceeds the quantity demanded, leading to excess inventory. ​ Businesses can manage surpluses by implementing strategies such as price reductions, promotions, bundling products, exporting to other markets, or adjusting production levels to align with demand. i. Shortages arise when the quantity demanded exceeds the quantity supplied, resulting in insufficient supply to meet consumer needs. ​ Businesses can address shortages by increasing production, adjusting pricing to manage demand, prioritizing key customers, sourcing alternative suppliers, or implementing rationing strategies. 10. **What are shifts and movements?** j. In economics, shifts and movements refer to changes in supply and demand curves on a graph. i. **Shifts:** A shift occurs when the entire supply or demand curve moves due to factors like changes in consumer preferences, income levels, technology, regulations, or external shocks. Shifts indicate a change in the quantity supplied or demanded at every price point. ii. **Movements:** Movements along the supply or demand curve occur when the price of a product changes, leading to a change in the quantity supplied or demanded while other factors remain constant. ​ Movements reflect changes in quantity but not the underlying factors affecting supply and demand. **[Unit 2-3 Differentiate Between Goods and Services]** 1. **Glossary Terms:** 2. **What are the characteristics of goods?** a. Goods are tangible items that can be touched or perceived by the senses. ​ They have utility, are scarce, and transferable. ​ Examples include physical products like clothing, electronics, and food. ​ 3. **What are the characteristics of services?** b. Services are intangible provisions that have utility, are scarce, and transferable. ​ They include activities or benefits provided by one party to another, such as haircuts, plumbing services, or consulting. ​ 4. **What types of businesses market goods and services?** c. Businesses across various industries market both goods and services. ​ Retailers, manufacturers, wholesalers, service providers, technology companies, healthcare providers, and entertainment companies are examples of businesses that market goods and services. 5. **What is the importance of marketing strategies for goods and services?** d. Marketing strategies are crucial for businesses to promote their goods and services, attract customers, differentiate from competitors, build brand awareness, drive sales, and ultimately achieve business objectives such as revenue growth and market expansion. 6. **What is the difference between a want and a need?** e. A need is something essential for survival or well-being, like food, shelter, or clothing. ​ A want, on the other hand, is a desire for goods, services, or experiences that are not necessary for survival but fulfill personal preferences or aspirations. ​ 7. **What is the difference between an economic and noneconomic want? ​** f. Economic wants require spending money to acquire goods or services, such as a car or a vacation. ​ Noneconomic wants, like spending time with friends, do not involve monetary transactions. ​ 8. **How is production affected by wants and needs? ​** g. Production is influenced by consumer wants and needs. ​ Businesses analyze market demands to determine what goods or services to produce, how much to produce, and how to allocate resources efficiently to meet consumer preferences and address market demands. 9. **What is the difference between consumer and industrial goods and services? ​** h. Consumer goods and services are intended for personal use or consumption by individuals, such as clothing or haircuts. Industrial goods and services are used by businesses or organizations in their operations, like machinery parts or consulting services for business operations. 10. **Why are the classifications of consumer and industrial products? ​** - Consumer and industrial product classifications help businesses understand the intended use and target market for their products. ​ By categorizing products into consumer or industrial segments, companies can tailor their marketing, distribution, and sales strategies to effectively reach their intended customers. ​ 11. **What are classifications of consumer and industrial products important? ​** - Classifications of consumer and industrial products are important for businesses for several reasons: - They help companies identify their target markets and design appropriate marketing strategies. - They guide businesses in determining pricing, distribution channels, and promotional activities based on the nature of the product. ​ - They assist in inventory management, production planning, and resource allocation by understanding the demand patterns for different types of products. - They aid in product development and innovation by focusing on the specific needs and preferences of consumer or industrial customers. ​ 12. **Describe the concepts of scarcity and transferability.** - **Scarcity:** Scarcity refers to the limited availability of resources relative to unlimited human wants and needs. ​ It is a fundamental economic concept that highlights the necessity of making choices due to the finite nature of resources. Scarcity drives decision-making in economics as individuals and businesses must allocate resources efficiently to satisfy their needs and wants. ​ - **Transferability:** Transferability is the ability of a good or service to be moved from one person or place to another. ​ It is a characteristic of economic goods and services that allows for exchange or trade. ​ Transferability enables goods and services to be bought, sold, or transferred between individuals, businesses, or markets, facilitating economic transactions and resource allocation. ​