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1. Businesses provide goods, jobs, and services to others.
2. Businesses seek to earn a profit by providing goods and services to others.
3. Revenue is the amount a business earns above and beyond what it spends for expenses
and costs.
4. Profit is the amount of money a business earns above and beyond what it spends for
salaries and other expenses.
5. Since all businesses make a profit, starting a business is not risky.
6. An entrepreneur risks time and money to start and manage a business.
7. If a business's costs and expenses are greater than its revenue, it will suffer a loss.
8. Profits of a business include the salaries paid to its employees.
9. Revenue is the total amount of money a business takes in during a given period by selling
goods and services.
10. Risk is the chance an entrepreneur takes of losing time and money on a business that may
not prove profitable.
11. The United States has one of the highest standards of living in the world.
12. The term "standard of living" refers to the amount of debt people can incur on a given
income.
13. Health care availability, a clean environment, and good schools all contribute to a high
quality of life.
14. Maintaining a high quality of life requires the combined efforts of businesses, nonprofit
organizations, and government agencies.
15. Stakeholders are all the people who stand to gain or lose by the policies and activities of a
business.
16. Stakeholders include customers, employees, stockholders, suppliers, dealers, bankers,
government officials and environmentalists.
17. Outsourcing means selling goods and services to people in other countries.
18. Outsourcing has caused many complications in many states where jobs have been lost to
overseas companies.
19. Insourcing refers to the practice of global companies setting up design and production
facilities in the United States.
20. The knowledge and skills learned in business courses are seldom relevant to students who
work for nonprofit organizations or volunteer groups.
21. Businesses and nonprofit organizations often strive to accomplish the same objectives.
22. Nonprofit organizations use financial gains to meet stated social or educational goals of
the organization rather than personal profit.
23. Social entrepreneurs are people who start and manage organizations that are not-for-
profit. Their mission is to help others improve their quality of life.
24. The only real purpose of a business is to make money for entrepreneurs.
25. The only way a firm can increase its profits is to increase its sales revenue.
26. The amount of profit or loss earned by a business can be found by subtracting the firm's
expenses from its revenues.
27. Nonprofit organizations are similar to businesses in that they often provide goods and
services that satisfy the needs of society.
28. Unlike businesses, employees of nonprofit organizations are not required to learn the
business skills of information management, marketing, or financial management.
29. Business decisions should consider the interests of customers, employees, suppliers,
government leaders, and stockholders.
30. By balancing the demands of customers and stockholders, businesses satisfy the
demands of all stakeholders.
31. An effort to please one group of stakeholders eventually pleases all stakeholders.
32. Insourcing creates new jobs, and helps offset the number of jobs being outsourced.
33. Robin has started her own online consulting firm. While she recognizes the risks involved
in operating a business, she is still willing to invest her time, effort, and money in hopes of
earning a profit. Robin is an example of an entrepreneur.
34. Backstreet Books, an eclectic bookstore on a large college campus, generated total
revenues of $15 million while incurring expenses of $12 million. During the year Backstreet Books
earned a profit of $3 million.
35. Since businesses strive to earn a profit, their owners benefit at the expense of the rest of
society.
36. John earned the same amount of money this year as he did last year. Thus, his standard
of living must be the same as it was last year.
37. Susan quit her job in a big city to take a less stressful position in a small town located in
a scenic area. She earns less money at her new job and has had to cut back on her purchases of
material goods, but she has more leisure time and really enjoys the clean air and scenic beauty of
her new home. Susan has accepted a lower standard of living in order to enjoy a higher quality of
life.
38. Political freedom, quality education, access to health care, and a clean environment are
all factors that contribute to an improved quality of life.
39. People living in San Jose, CA, on average earn more money than people living in St. Louis,
MO. The citizens of San Jose enjoy a higher standard of living than the citizens of St. Louis.
40. The major difference between businesses and nonprofit organizations is that only
businesses can increase the standard of living, while only nonprofit organizations can improve
the quality of life.
41. A charitable organization, such as the American Red Cross or Salvation Army, is classified
as a for-profit organization.
42. It was reported by a Beijing newspaper that China succeeded in improving its people's
standard of living and establishing a relatively affluent society recently. This report clearly
indicates that both income levels and the price of goods and services rose significantly during
that time period.
43. Starting a business is a riskier path toward business success than working your way up
the ranks of a large business.
44. Working as an entrepreneur is the only way to succeed in business.
45. Paid vacations and health care insurance are among the benefits provided by the
government to entrepreneurs.
46. Women currently own less than 10 percent of all businesses.
47. The number of businesses owned by Asian Americans Hispanic Americans, and Native
Americans has grown dramatically.
48. Land, sometimes called natural resources, is the most critical factor of production in
explaining why some countries are poor while others are rich.
49. Money is one of the five factors of production that contribute to the creation of wealth.
50. Tools, machinery, and buildings are examples of capital resources.
51. The major advantage rich nations have over poor nations is an abundance of land and
labor.
52. Entrepreneurship is one of the five factors of production that contribute to the creation of
wealth.
