Business Exam
Unlike business organizations, profit is not the main purpose of the non-profit organization. Non-profit organizations have the right to engage in entrepreneurial activity and they can make a profit, but this can be only a minor activity and it only serves to achieve the objectives for which this organization was created. Non-profit organizations may be created in order to achieve social, charitable, cultural, educational, scientific and management purposes, and for other purposes, aimed at achieving the public good. A non-profit organization can be created as a public organization, a fund, an autonomous non-profit organization, non-profit partnership, institution, association. The purpose of non-profit organizations is not making a profit, but the achievement of goals and objectives (specified public benefit purposes).
Factors of production: natural resource (land), labor, capital and entrepreneurship.
Capitalism is an economic system prevailing in the Western world after the collapse of feudalism, in which most of the means of production are privately owned; production and distribution are taking place under the influence of market mechanisms ("Capitalism").
Socialism is an economic, social and political system, characterized by that the process of income generation and distribution is under the control of society. The most important category of socialism is social ownership of the means of production, which is fully or partially replace the private ownership.
Communism (Marxism) is an organization of society in which the economy is fully based on social ownership of the means of production.
According to the definitions mentioned above, the U.S. is under capitalism.
Problem #2
Social responsibility is a responsibility to the people and given them promises (obligations). This is the most common sense of responsibility. Any other types of responsibility are a form of social responsibility.
Business ethics are the rules and norms of official conduct. Business ethics is a system of ideals that stand behind the entrepreneur, manager or any business person in the process of reaching their goals.
Stages of developing ethical standards: pre-conventional, conventional, post-conventional and further stages.
Four main consumer rights: the right to safety, the right to be informed, the right to choose and the right to be heard (Hardcastle).
Problem #3
The economy is a set of economic management science, a kind of social science that studies the relationship between people in the process of production, consumption, distribution and exchange of goods or services. The subject of economic theory is how an individual and society choose the way of using limited resources.
Microeconomics is an area of economic research, which focuses on how the behavior and decisions of the individual affect the supply and demand for goods and services.
Macroeconomics is the branch of economics devoted to the study of large-scale economic phenomena and processes related to the country's economy as a whole.
Demand is the amount of goods that customers are willing and able to acquire for a certain period of time for all possible prices for this commodity.
The value of supply reflects the desire of the manufacturer (seller) to deliver the goods and services to the market for sale.
The economic performance in America is evaluated by a great number of economic indicators. Among them: Gross national product, unemployment, inflation, consumer price index, etc.
A recession is a decline in production, which is characterized by zero or negative growth of the main macroeconomic indicator - gross domestic product (GDP), which lasts for six months or more time. Depression is a strong reduction in real GDP for a few years in a row.
Unemployment is the socio-economic phenomenon, when a part of the economically active population can not apply their labor.
Problem #4
Four types of competition: pure competition (foreign exchange markets, sometimes agricultural markets and internet related industries), oligopoly (national mass media in the U.S., smartphones operating systems market), monopoly (providers of natural gas or water, public transport) and monopolistic competition (restaurants, clothing stores, hair salons, etc.)
Problem #5
Each country does not have enough resources or capacity to reach all the goals in satisfying the needs and wants of the population. So, countries trade with each other. The country has an absolute advantage in the production of goods X, if it produces it at lower cost than other countries. A country has a comparative advantage in the production of goods, if the opportunity cost of its production in this country is less than in other countries.
A tariff is a state fee that is levied on imported and exported goods, as well as on some other operations, regulated by the state. The exchange rate is the rate at which one currency is exchanged for another, the price of the monetary unit of the country expressed in foreign currency. Export is the shipping of national products in order to sell in other countries. Import is the shipping of goods from foreign countries to the national borders with the purpose of selling in the domestic market.
CAFTA is the Central American Free Trade Agreement. NAFTA is the North American Free Trade Agreement. GATT is the Genderal Agreement on Tariffs and Trade.
There are many barriers that confront global businesses. Among them: cultural and social differences, economic differences, types of trade restrictions, legal and political differences and so on.
Problem #6
Small business is the business carried by the subjects of the market economy under certain criteria that are prescribed by laws, government departments or other representative organizations. The most common criteria of small business are: the volume of staff, the volume of authorized capital, the value of assets and the volume of profit. Small business plays an important economic and social role in the development of the economy as a whole. For example, the level of competition, the introduction of new technologies and production efficiency depend on the development of small business. Among the reasons why small business fail, it is necessary to highlight the following: lack of funds, the early expansion of the business, significant dependence on debt financing, poor strategic management, the lack of a business plan, high sensitivity to the deterioration in macroeconomic conditions.
Type of ownership in the business: Sole proprietorships, partnerships, corporations, franchising, cooperatives, joint ventures, etc.
Problem #7
Management hierarchy is a way of building of the organization of complex economic systems, in which the parts (elements) of the system are distributed through the levels. For example: Director (the first level of hierarchy) -> Deputy Directors (the second level of hierarchy) -> Heads of departments (the third level of hierarchy).
Three types of managerial skills: conceptual, technical and human managerial skills ("Managerial Skills - Three Types").
Four basic functions of management: Planning, organizing, leading and controlling ("What Are The Four Basic Functions That Make Up The Management Process?").
Leadership is a management relationship between the leader and the followers, based on an effective combination of different power sources, which is aimed at encouraging people to achieve common goals.
Problem #8
The five types of non-traditional marketing are: person marketing (interest, preferences – specific celebrity or candidate), place marketing (tourism), cause marketing (based on a social issue, for example – ASPCA or “Save the Children), event marketing (cultural, sporting or charitable activities) and organizational marketing (benefit organizations, such as American Red Cross, Nature Conservatiory, etc).
There are four strategies (4 P’s) of the marketing mix: Product, price, place and promotion.
Problem #9
Marketing is the implementation of business processes in the aimed at the flow of goods and services from producer to consumer.
Target marketing is a form of marketing activity when the seller differentiates market segments, selects the one or more target segments (target market) and develops marketing methods for each of them separately, specifically, with regard to the choice of goods that are the most effective for each market segment. Segmentation method is a method of identification of the groups of customers in the market that have similar needs and characteristics. Consumer behavior is the process of the selecting, securing and using of products and services by the groups, individuals or organizations.
Problem #10
Accounting is an ordered system of collecting, recording and summarizing information about a property or obligations of the organization and their circulation, expressed in monetary terms.
The four basic financial statements are: Balance sheet, income statement, statement of retained earnings and statement of cash flows ("The Four Basic Financial Statements: An Overview").
The basic accounting equation states that assets are equal to the sum of capital and liabilities. For example, I bought a computer at a price of $900. To pay for it, I used $500 of my cash savings and borrowed $400. Now, I have assets that worth $900. My liabilities are $400 and equity (capital) is $500.
Works Cited
"Capitalism". Encyclopedia Britannica. N.p., 2014. Web. 18 May 2016.
Hardcastle, Jonathon. "The 4 Consumer Rights". EzineArticles. N.p., 2016. Web. 18 May 2016.
"Managerial Skills - Three Types". Entrepreneurship In A Box. N.p., 2009. Web. 18 May 2016.
"The Four Basic Financial Statements: An Overview". Highered.mheducation.com. N.p., 2016. Web. 18 May 2016.
"What Are The Four Basic Functions That Make Up The Management Process?". Smallbusiness.chron.com. N.p., 2016. Web. 18 May 2016.
