Business — only activity that provides good or services by operating at a profitGoods— tangible productsBreaking even — not making profit, not losing money.Standard of living— Measures the amount of goods that ne can purchase with their earnings.Quality of life— Measures the general well being of the society.Social entrepreneurs— use business principles to start and manage not-for-profit organizations to address social issues.E-commerce— The buying and selling of goods on the internet.Database— Electronic Filing system where data is organized in a systematic manner.Identity Theft —When someone can get ahold of your personal information, they can take your identity.Outsourcing— giving contract to an outside organization or business to handle some of the firms functions.Insourcing— When foreign country opens either a factory or a facility here in our country and employs Americans.Entrepreneurship— Traits that people have that makes them wiling to take risk in starting and managing a business.Five factors of production— Land, Labor, Capital, Entrepreneurship, and Knowledge.Important changes to the Global Environment— Growth of Global Competition, Increased free trade among nations, and Development of efficient distribution systems.Greening — Businesses were asked to stop polluting the environment. Some of them resisted but now they are embracing it.Short Answer for Chapter 1:What is entrepreneurship? What are the advantages and disadvantages?Entrepreneurship— Traits that people have that makes them wiling to take risk in starting and managing a business.Advantages:1. You get to be your own boss and make all of the decisions.2. You get a chance to become wealthy3. You can take pride in the success of you business4. You get to leave a legacy behind5. BeneficialDisadvantages:1. Requires a lot of investment2. Can be overwhelming and stressful3. You need to put in long hours4. Easy to fail5. No Paid benefitsWhat is technology and how does it help businesses? (List 3 Reasons)Technology— anything that enables us to accomplish our tasks more efficiently and effectively.It Helps us because:1. It is effective2. It is Efficient as they are using less resources and less labor hours.3. More productive4. Can use social media to promote businessesWhat type of changes are taking place in the global environment?1. Growth of global competition2. Increased free trade among nations3. Development of efficient distribution systems.4. Transportation has improveda. Cities with larger population, more businesses will want to go there because of increased economic opportunity.Key Terms and Concepts From Chapter 2:Economics —The study of how a society chooses to employ its resources in providing goods and services among its people.Macroeconomics—Looks at the whole nations economy. Concerned about what affects the entire nation. Ex. Stock market, interest rates. Unemployment rates. GDPMicroeconomics— Looks at issues that affect a particular industry or a particular market.Resource Development— The study of finding creative ways of using the resources in the most efficient manner. Ex. Using wind power, Solar power, hydrogen.Capitalism’s Basic Rights1. Right to own private property2. Right to own a business and keep all the business’s profits3. The right to freedom of competition4. The right to freedom of choice.Supply— The quantities of products businesses are willing to sell at different prices.Demand— the quantities of products consumers are willing to buy at different prices. The higher the price, the less people will buy.Equilibrium Point (Market Price)— Determined by supply and demand, this is the negotiated price. It tells companies how much of a product that they should produce.Four Degrees of Competition — Perfect, Monopolistic, Oligopoly, Monopoly.Perfect Competition— There may be few or more sellers, but the products that they sell are identical. Ex. Gas, produce.Monopolistic Competition— There are many sellers, they sell similar products, but not identical.Product Differentiations— sellers try to differentiate themselves from other sellers.Oligopoly— There are few sellers, and their products are somewhat similar. Together they set the price and there is not much fluctuation. Ex. Cell phone carriers, oil refineries.Gross Domestic Product— Total value of goods and services that are produced within a country over a specific time period. Measured Every quarter. When GDP declines for two consecutive quarters, a recession is declared.Growth Rate is very importantIf you see over 4.1% growth every quarter, you see less unemployment.Unemployment Rate— Anyone who is at least 16 years old and has been looking for a job for at least 4 weeks or more is factored into calculating unemploymentNever had a rate below 5%Frictional Unemployment— People have quit their job voluntarily.Structural Unemployment— Businesses have restructured and laid off a lot of peopleCyclical Unemployment— due to downturn in economy such as recession.Seasonal Unemployment— seasonal workers are out of jobs when the season is over.Inflation— general rise in prices. You lose buying power.Disinflation— When prices are rising but the rate of increase has slowed down.Deflation— when prices are falling but there is still less demand or less economic activityStagflation— when prices are rising even though there is less economic activity or demand.Consumer Price Index (CPI)— Measures the level of inflation. When this happens, they increase benefits like social security and unemployment to help balance out the inflation.Producer Price Index (PPI)— measures inflation at the whole sale level. Industry parts and materials for the things they are using have increased or not.Fiscal Policy— when the government uses tax to make the changes in the economy, or it spends money.Taxation— Raise taxes during inflation so that the inflation will go down. They lower taxes whenever there is a recession so people can go and buy more products that they need.Government spending— they fix things and build highways.National Deficit— When government spends more money that what it receives.Monetary Policy— The Feds (Federal Reserve Bank) most visible role is increasing and lowering interest rates. If there is inflation, they will increase the interest rate.Short Answer for Chapter 2:Ways money comes inExportInvestmentsExporting ServicesTourismInternational StudentsWays money