[BUS 1000] - Midterm Exam Guide - Comprehensive Notes for the exam (17 pages long!)

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Baruch College
BUS 1000
MIDTERM EXAM
STUDY GUIDE
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Key Terms/Words Chapter # 1
o Business
o Entrepreneur
o Factors of Production
o Loss
o Profit
o Services
o Nonprofit Organization
o Productivity
o Quality of life
o Revenue
o Stakeholders
o Standard of Living
o Demography
o E-Commerce
Class Film on Amazon
o An entrepreneur, Jeff Bezos, who founded Amazon with a small amount of money and is
now estimated to be worth over $50 billion
THE UPS and DOWNS of ENTREPRENEURSHIP
o Ups:
The freedom to succeed
Make your own decisions
High possibility of wealth
Hire your own staff
o Downs:
The freedom to fail
No paid vacations
No health insurance
No daycare
FIVE (5) FACTORS of PRODUCTION
o Land (or natural resources)
o Labor (workers or technology)
o Capital (machines, tools, buildings)
o Entrepreneurship (risk taking willingness)
o Knowledge (most important factor according to Peter Drucker--famous business scholar)
o What makes countries rich today is a combination of entrepreneurship and the
effectie use of knoledge. Entrepreneurs use hat they’e learned to gro their
businesses and increase wealth.
GOODS and SERVICES
o Goods -- Tangible products such as computers, food, clothing, cars and appliances
o Services -- Itagile produts that a’t e held i our had like, eduatio,
healthcare, insurance, recreation and travel.
o Success in business is often based on the strategy of finding a need for a product or
service and then filling that need.
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BUSINESS and ENTREPRENEURSHIP
o Business -- Any activity that seeks to provide goods and services to others while
operating at a profit.
o Entrepreneur -- A person who risks time and money to start and manage a business.
o Successfully filling a market need means you could make money for yourself and
provide jobs for others. Example-Microsoft and Bill Gates (1/3) of their employees are
multi-millionaires
REVENUE, PROFIT AND LOSS
o Revenue -- The total amount of money a business takes in during a given period by
selling goods and services.
o Profit -- The amount of money a business earns above and beyond what it spends for
salaries and other expenses.
o Loss -- Occurs he a usiess’ epeses are ore tha its reeues.
RISK
o Risk -- The chance an entrepreneur takes of losing time and money on a business that
may not prove profitable, or might even completely fail
o Businesses take risks, but with great risks could also come great profits.
o The forula i busiess usually is the higher the risk the greater the reward. This is by
no means guaranteed though.
QUALITY of LIFE
o Quality of Life -- The general well-being of a society in terms of its political freedom,
natural environment, education, healthcare, safety, amount of leisure and rewards that
add to personal satisfaction.
Countries with the Highest Quality of Life Chart
STAKEHOLDERS
o Stakeholders -- All the people who stand to gain or lose by the policies and activities of a
business and whose concerns the businesses need to address.
o Who are typical Stakeholders?
Customers
Employees
Stockholders
Supplier
Dealer
Local community member
The various media
Elected Officials
Environmentalists
OUTSOURCING and INSOURCING
o Outsourcing -- Contracting with other companies (often in other countries) to do some of
the fir’s futios. Gap making jeans in Cambodia to sell in the USA.
o Insourcing -- Foreign companies opening offices and factories in the United States.
Hyundai-designs and engineering in Michigan; cars produced in Alabama. (today there
is a trend for more of this in America) (BMW in South Carolina)
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