INTRODUCTİON TO BUSİNESS

An entrepreneur is an individual who starts a business and risks losses (in terms of money, time and reputation) for profits. Therefore, profits are the rewards entrepreneurs receive for producing goods and services that consumers
want.

According to the American Marketing Association, the marketing function involves activities to create, communicate, deliver and exchange offerings that have value for customers. This function provides customer service and customer support including advertising to potential customers.

The research and development function is necessary for firms to develop new and innovative products to meet customers’ needs or to exceed their expectations. Many firms are also involved with using new technologies such as the use of information and communications technology and the Internet in their
operations.

National business serves the whole country.

There are six major forces of the environment: the economic environment, the technological environment, the legal and political environment, the social environment, and the global environment.

Empowerment refers to giving an employee or a team the power, information,
responsibility and accountability to do the job well.

Financial capital refers to money or funds used to create and operate a business. It can come from one’s personal savings, from friends and family, via business loans, from investors and through other forms of fund-raising such as crowdfunding.

Private enterprise under the free-market system requires the existence of four
conditions:
• Private property - individuals have the right to own private property and resources that are used to create wealth.
• Freedom of choice – employees can work where they choose, consumers can buy what they want, and firms can hire people and produce what they choose.
• Profits – owners can keep the profits for themselves as rewards for taking risks.
• Fair competition – free and fair competition is the basis for a free-market system to operate efficiently.

The law of supply - the amount of a product supplied will increase as the price
rises; and if the price drops then less of the product will be supplied.

A rising GDP indicates that businesses are doing well.

Stakeholders are the groups of people that have a stake in or are affected by the decisions, activities and policies made by an organization. Major organizational stakeholders are owners (shareholder/ stockholders), customers, employees, investors, suppliers and communities.

Competitors are not necessarily affected by decisions of a business organization. Thus, the correct answer is C.

A local business operates in a limited geographical area such as a town or a city while a regional business serves a larger area such as the southern or eastern part of a country. A national business operates across the whole country, and an international or multinational business operates in more than one countries.

Therefore, a pizza restaurant with outlets in a certain region of a country constitutes an example of a regional business. 

The correct answer is B.

The social environment refers to the trends and forces in a society under which all businesses operate. Its elements include demographic factors, customs and values, and social and economic movements of the society.

Thus, the food chain in the example considers social environment conditions when deciding not to offer beef in Asia and pork in the Middle East. The correct answer is E.

Every firm operates within a particular market environment in which revenues are obtained. In the market environment, companies interact with customers, employees, suppliers and competitors. Customers expect to receive value from a firm’s products. This means that a firm should offer products that have certain level of quality, at reasonable prices along with good customer service compared to its competitors’ products and customer service. Companies should establish close relationships with their suppliers because product quality, price and timeliness of delivery depend on material resources provided by suppliers.

Employees are very important in helping firms to become more effective. Frontline workers (those who have direct contacts with customers such as salespeople) should be given responsibility, authority, and freedom to do their jobs in order to quickly meet customers’ needs and expectations, i.e. to empower employees. In the market environment, firms need to be able to compete effectively and to distinguish themselves from their competitors to drive enough revenues for their survival and to prosper.

The correct answer is C.

Cyclical unemployment occurs due to the business cycle, i.e. economic fluctuations. It rises during economic downturns as businesses cut back their workforce. It declines during periods of economic growth when firms begin to hire again.

The correct answer is A.

An industry where only a few suppliers exist, each with a large share of the market, is called an oligopoly market. Typically, these firms are fairly large, and often require a high investment of financial capital to enter the market. Therefore, entry into the market is restricted.

The correct answer is E.

Small businesses are very important to most economies, even in advanced economies like the U.S. and the U.K. For example, 99.7% of the U.S. firms are considered to be small businesses in 2012 (less than 500 employees). In Turkey, 99.8% of all enterprises in Turkey are made up of SMEs or those with less than 250 employees which employ more than 73% of the workforce. Thus, small businesses constitute the majority of all enterprises in most economies.

The correct answer is E.

A general partnership means that the partners can invest equal or unequal sums of money but are equally liable for the debts and obligations incurred by the firm’s operations.

The correct answer is A.

Corporate social responsibility (CSR) is the concerns and obligations businesses have for the welfare of their stakeholders and the larger society. CSR goes beyond being ethical, beyond what is required by law and beyond the pursuit of profits. The obligations of businesses are often described by their commitments to various stakeholders such as customers, employees, investors and communities.

The correct answer is A.

Insider trading involves the use of private or special company information for financial gains, often in the form of buying or selling of stocks.

The correct answer is D.