Entrepreneurs and small business start-ups are advised to take calculated risk. Those that take the most risk may make the most profit.

Profits equal _______.

Profits are what the firm earns above and beyond what it pays out for expenses and salaries.

Which of the following circumstances is most likely to reduce one’s standard of living?

By definition, the standard of living is the amount of goods and services that people buy, with the funds they have available. As such, if you increase the price of a good in high demand such as gasoline, the added expense will cut into the funds available to buy other things or the funds one can put in savings.

When developing and maintaining good stakeholder relationships, companies find that _______.

Stakeholders are people and organizations who stand to gain or lose by the actions of the business. Examples of stakeholders include customers, employees, government organizations, suppliers, and even community citizens. Firms must balance the need to make profits with the needs of stakeholders.

Judy started a business called Music and Memories™. She recognized that music, socialization, and memory-challenging activities for senior citizens helped maintain their cognitive skills for longer periods of time. Though she strives for a financial gain, she uses the excess funds for enriching her programs instead of a personal profit. Her organization is classified as:

Nonprofit organizations strive for financial gains, like a for-profit business. However they repurpose the additional funds for increasing their social or educational goals.

The number of businesses owned by immigrants, minority groups, and women has ________ in recent years.

Millions are taking the entrepreneurial challenge. The number of minority-owned businesses in the U.S. has grown dramatically.

Which of the following is (are) not considered a factor of production?

The five factors of production are (1) land, (2) labor, (3) capital, (4) entrepreneurship, and (5) knowledge

Darnell lives in an area where labor is plentiful and locations for start-ups are relatively cheap. He is also confident that he can find start-up funds for a graphic arts business. As he evaluates the opportunity for his proposed venture, which two other factors of production does he need to succeed?

The factors of production are capital, land, labor, entrepreneurship, and knowledge. In this situation, Darnell has learned that labor is available; start-up land is plentiful and economically feasible; and he is able to secure start-up capital. This leaves entrepreneurship (innovation/other intangible characteristics) and knowledge about his proposed craft that require focus.

To encourage entrepreneurial growth, governments might _______.

The government can lessen the risks of entrepreneurship by passing laws that enable businesspeople to write contracts that are enforceable in court. In countries that don’t yet have such laws, the risks of starting a business are that much greater.

Juan has many business ideas that could satisfy the unfulfilled needs of people who live in his community. However, there are laws that govern the type of businesses that private citizens can own and business taxes are high because the government subsidizes many social programs in his nation. In this case, challenges in the _________________ environment increase the risk of Juan starting a business.

The legal and economic environment can either increase the risk (too many laws may restrict trade; increasing taxes may act as a disincentive for starting a business), or decrease the risk (the ability to successfully find capital; laws that permit competition, and laws that keep taxes at a minimal level) of starting a business.

When corruption is evident in governments:

When governments are corrupt, it?s difficult to build a factory or open a business without government permits. Often these permits are obtained via bribery.

One of the most serious negative results of the increased use of databases by companies has been:

The legitimate collection of personal customer information opens the door to identity theft.

At Backstreet Books, Inc., the department manager uses a hand-held scanner to determine the quantity of each best seller the bookstore has on its shelves, how many copies of each book was sold the past week and the past month, and exactly when the next shipment of these books is expected to arrive. Backstreet Books embraces the strategy of _______.

Businesses must explore the technological environment that surrounds their respective industries. When scanning the technological environment, it is important to ask the following questions: Are there technologies the business could employ that would enhance the product or service offering? Are there technologies emerging that could threaten the demand for the products or services offered?

Blake wanted to offer high-quality meals in his restaurant. His motto was “the best darn meat and potatoes for miles around.” The locals agreed that the food was good. They also agreed that if you decided to eat there, be prepared to wait. Food preparation and service were slow. Although Blake’s motto stated the business’s competitive advantage, your accurate advice to Blake would be _______.

In today’s competitive environment, customers are looking for a combination of good quality and good service.

Lance and Laurie live on three acres of land in North Carolina, with two llamas, five goats, six chickens, and two dogs. The goats provide milk, cheese, yogurt and even fiber that is woven into yarn; the chickens provide free-range eggs; and the llamas serve as protection for the other animals. Although Lance and Laurie have other professional jobs, their home lifestyle represents _______.

An important social trend that continues to grow in strength is a concern for what we eat and where it comes from. Business managers must continually scan the social environment for changes in attitudes, beliefs, and lifestyle trends.

Among the changes resulting from increased global trade are:

Globalization has greatly improved living standards around the world.

The impact of war and terrorism on U.S. business is that:

Recent acts of war and terrorism have drawn billions from the U.S. economy. Some companies have benefited greatly, but others have lost workers or funds due to the war effort.

The following chart describes opportunities and challenges in the external environments that surround businesses. Which of the following statements best characterize and fit in the empty cells?

Business Environment

Opportunity

Challenge

Economic & Legal

Freedom to choose and start your own business

High taxes

Technological

The Internet

Social

Wealthy senior citizens

Decrease in Social Security contributions

Global

War and Terrorism

With more and more advances in using the Internet to gather information and enact business, there has been a significant increase in identity theft. Saving energy and producing products that cause less harm to the environment is a trend called greening.

The new era of business will:

We?re in the midst of an information-based global revolution that will alter all sectors of the economy: agricultural, industrial, and service.

Today, high-paying service-sector jobs in the U.S. can be found in ___________________.

Today, high-paying jobs in the service sector include health care, accounting, entertainment and telecommunications. The service sector is also where most hiring is occurring. The service sector makes up over 70% of the value of the U.S. economy.