1 Business Basics

How is a want defined?

• Something that you need for survival.

• People who use goods and services.

• Something that adds pleasure and comfort to our lives but isn't necessary for survival.

• A person who is buying or has just bought, a good or service.

How is a need defined?

• Something that adds pleasure and comfort to our lives but isn't necessary for survival.

• Something that is necessary for survival.

• An intangible activity that someone does for you.

• A tangible item that satisfies consumer wants or needs.

What are the primary characteristics of a good?

• The item is tangible; exclusive and permanent ownership is obtained.

• A good makes you feel good.

• Someone else does something to or for you.

• Ownership is not obtained.

What are the primary characteristics of a service? _{There are three correct answers to this question.}

• Permanent and exclusive ownership is obtained.

• Ownership is NOT obtained.

• Involves skill and experience

• Intangible

What is a consumer? _{This question has two correct answers.}

• Someone who buys goods and services

• Can be and individual or a company

• Any items that a business uses to make goods and services.

• The person who works at the store where you buy groceries.

What is the definition of revenue?

• Money a business uses to purchase supplies.

• The money businesses receive from customers when they buy goods or services.

• Money that is invested in a company's future.

• Money an employee receives for working for a company.

What is the definition of expense?

• Any money spent by a business to buy the capital goods needed to make the goods or deliver the services offered to customers.

• Money a business receives from customers for the sale of goods or services.

• The internal deliberations of the administrative staff regarding what to have for lunch.

• Deciding the color scheme and carpet color for the new office renovations.

The money a business has left at the end of the month after paying ALL their bills. Also known as Net Margin.

• Taxes

• Wages

• Profit

• Income

What is the formula for profit?

• Expense - Revenue = Profit

• Revenue - Expense = Profit

• Profit - Expense = Revenue

• Revenue + Expense = Profit

If, after applying the profit formula, the net margin is a negative number, the business has suffered a...?

• Profit

• Expense

• Loss

• Breakeven