Introduction to Business

Final Exam Study Guide2010

Chapter 1

• Wants – things you can live without• Needs – things you cannot live without• Service Business– Hair care, doctor, lawyer

• Scarcity– Not enough resources to satisfy every need

Chapter 1

• The Rational Decision Making Process– Specify– Search– Sift – Select – Study

Chapter 1

• Opportunity Cost– The value of the next best alternative

• Impulse Purchase– Buying on a whim

Chapter 1

• Types of Economies– Command (Government is in charge)– Market (People are in charge)– Traditional (things are done the same for

generations)– Mixed = Market + Command

Chapter 1

• Law of demand:– As prices goes up, demand goes down

• Principles of US Economy– Private property (own use and dispose of things)– Freedom of choice (can make own decisions but

must accept consequences)– Profit (Price – Cost)– Competition (contest among sellers to win

customers)

Chapter 15

• Government Agencies– USDA – inspect and grades meat products– FTC – protects against unfair business practices– CPSC – protects consumers from dangerous

products– FDA – regulates food and prescription drugs

Chapter 15

• Types of advertising– Persuasive (appeals to emotions)– Informative (educates you)– Puffery (legal exaggeration)

Chapter 15

• Right to be informed– Businesses must provide accurate information– Read labels

• Right to Safety– Products cannot harm– Follow directions

Chapter 15

• Right to choose– Businesses must provide a variety– Use the 5 S’s

• Right to be heard– Government must listen to consumers– Tell the government

• Right to remedy– Businesses must provide solutions– Go back to business and ask for refund or exchange

Chapter 15

• Right to Consumer education– Information or classes must be available– Take classes

• Right to Service– Businesses must be respectful– Go back to businesses that are respectful

Chapter 15

• Monopoly– Company that has an unfair advantage over other

businesses

• Complaint process– Go back to the seller– Write the manufacturer– Go to the Better Business Bureau (BBB)– File a lawsuit

Chapter 15

• Arbitration– Third party that resolves a dispute between a

consumer and business. The decision is legally binding

• Mediation– Third party that attempts to resolve a dispute

between a consumer and business. Their decision is not legally binding

Chapter 15

• Class Action Lawsuit– When a lawsuit is filed on behalf of many people

against one business.

• Guaranty– Company’s promise that products will work or

they will fix it

• Implied Warranty– Unwritten guarantee

Chapter 15

• Brand– Name given to a product to distinguish it from

other products

Chapter 16

• Budget– Plan for dividing income among saving and

spending

• Advantages of a financial plan– Reduces uncertainties

Chapter 16

• Assets– Things you owe

• Liabilities– Things you own

• Net worth = Assets – liabilities• If net worth is 8,000 and liabilities is 5,000

what are assets?

Chapter 16

• Fixed Expenses– Savings– Rent– Cell phone bill

• Variable Expenses– Going out to eat– Going to the movies– shopping

Chapter 16

• Successful budgets are– Realistic and flexible

• Pay yourself first means– Put money in savings before spending on anything

else

• Living within your income means that you don’t spend more than you earn

Chapter 16

• Most uncertain aspect of budgeting is– Estimating variable expenses

• Most common source of retirement is– Social security

Chapter 9

• Mobility– Willingness to move where the jobs are

• Talent– Natural ability to do certain things

• Purpose of a cover letter– to get you the interview

• Reference– People who can report on your character

Chapter 9

• Ways to prepare for an interview– Dress appropriately– Be on time– Practice questions– Go alone

Chapter 9

• Good source that gives in-depth information on hundreds of occupations– Occupational Outlook Handbook

• Values– Things that are important to you

• Interview– Face-to-face meeting with a potential employer to

see if you are a good fit for a job

Chapter 9

• It is important to leave a job on good terms because you might want to use them as a reference for a future job

• Job success strategies– Ask questions– Don’t be late– Don’t complain– Honor break times– Be friendly to everyone

Chapter 9

• Civil Rights Act of 1964 prohibits job discrimination for these five areas– Race– Color– National origin– Religion– gender