Chapter Assessment - Introduction To Business - ثاني ثانوي

Chapter 1 Review Business Concepts 1.1 Business and Economic Systems Assessment Goods and services that are necessary for us to live are called needs. Goods and services that add comfort and pleasure to life are wants. Economic resources are the things available to use to produce goods and services. Economic resources are also known as factors of production. The three kinds of economic resources are natural resources, human resources, and capital resources. • All countries must answer three economic questions: What goods and services will be produced? How will the goods and services be produced? What needs and wants will be satisfied with the goods and services produced? In a command economy, most resources are owned and controlled by the government. In a market economy, resources are owned and controlled by the people of the country. In a traditional economy, goods and services are produced the way they have always been done. A mixed economy combines elements of command and market economies. Gross domestic product (GDP) is the total market value of all final goods and services produced in a country during one year. GDP per capita is calculated by dividing GDP by the total population. The labor force consists of people actively working or seeking work. The unemployment rate is the portion of people in the labor force who are not working. Productivity is the production output in relation to a unit of input, such as a worker. Personal income refers to salaries and wages, as well as investment income and government payments to individuals. Retail sales measure the sales of goods and services bought by consumers. Investment activities that promote economic growth include personal savings, buying stock as ownership in a corporation, and purchasing bonds from businesses and government. 1.2 Success in Business Business success involves two main types of skills: technical skills and general career skills. • A person can obtain career experience through work-study programs, internships, part-time employment, volunteering, and school activities. Management and leadership positions require an ability to plan, organize, lead, and motivate people, as well as manage the productive resources of the company. • The types of businesses that provide employment opportunities include manufacturing, wholesaling, retailing, services, agricultural and aquaculture, and extracting. • The main business risks a company may encounter are geographic, political-legal, social-cultural, economic, operational, and unexpected risks. The rewards associated with owning and running a business include making a profit, earning a living, contributing to the quality of life in society, and gaining personal satisfaction. 1.3 The Business Environment • The movement of the economy from good times to bad and back again is called a business cycle. A business cycle has four phases: prosperity, recession, depression, and recovery. Inflation is a continuous and influential rise in the level of prices. Inflation can occur when the demand for goods and services is greater than the supply. Deflation is a decrease in the general price level. وزارة التعليم Ministry of Education 2024-1446 Assessment | 47

Interest rates represent the cost of money. Interest rates in an economy are affected by the supply and demand for money. The four types of competitive situations are perfect (pure) competition, monopolistic competition, oligopoly, and monopoly. Supply is the quantity of a good or service that businesses are willing and able to provide. Demand is the quantity of a good or service that consumers are willing and able to buy. • The future of business for every country requires knowledge and a plan to identify the resources, economic conditions, and local and global business opportunities of the nation. Business growth will depend on increased training for job skills, enhanced use of technology, and wise capital allocation. Think Critically About Business 1. Identify five products or services that could be either a need or a want. Provide an example for each that illustrates when it would be considered a need and when it would be considered a want. 2. Select a business with which you are familiar. Describe factors of production used by the business that fit within each of the three kinds of economic resources. 3. Find an article that discusses the scarcity of a product, service, or natural resource. Write a summary of the article in which you identify who is affected by the scarcity and the effect it is having on businesses and consumers. 4. Develop a table that compares the answers to the three economic questions for a command economy, a market economy, and a traditional economy. 5. "GDP is the best measurement of a country's economy." Explain why you agree or disagree with this statement. 6. The GDP of Country A is SAR 400,000. The GDP of Country B is SAR 800,000. Does this mean that the per capita output of Country B is about twice that of Country A? Explain. ليم 48 Chapter 1 | Exploring the World of Business and Economics Ministry of Education 2024-1446

7. Name three factors that can contribute to increased output of goods and services in a country. Explain how these factors can improve productivity. 8. Retail sales is a measure of items bought by consumers. What are some examples of goods and services you have bought that would be included in retail sales? 9. What actions would you recommend to a person who is considering investing in the stock market? 10. For success in business, explain why a person needs both technical skills and general career skills. 11. Identify an important decision you might need to make in the near future, such as selecting a college or career or making a major purchase. Illustrate how you would complete each step in the decision- making process (see Figure 1-2) for this decision. 12. Describe actions a business might take to reduce risks. 13. Suppose that many auto and steel plants close in a country. Thousands of workers lose their jobs in a short period. If the country had previously been enjoying prosperous times, what phase of the business cycle might it be heading into now? Describe other conditions that might begin to occur. 14. Why is a high rate of inflation generally considered harmful to an economy? 15. Describe actions businesses and government might take in each phase of the business cycle. 16. What actions might be appropriate to maintain fair competition among businesses? وزارة التعليم Ministry of Education 2024-1446 Assessment | 49

17. Review recent news reports of products and services where price has been affected by supply and demand factors. Write a report using those examples that discusses the effect of supply and demand on prices. 18. Give an example of a world economy problem and suggest a solution for it. Develop Your Business Language Match the terms listed with the definitions. Term Your Choice Definition 19. business cycle 20. command economy a. The method a country uses to answer the three economic questions. b. Things available to use to produce goods and services. 21. depression C. A market situation with many buyers and sellers of a product. 22. economic resources d. Not having enough resources to satisfy every need. 23. economic system e. 24. GDP per capita f. 25. general career skills 26. gross domestic product (GDP) h. 27. inflation 28. market economy 29. mixed economy 30. monopolistic competition I. 31. monopoly 32. oligopoly g. i. j. k. A competitive situation with a few large sellers. Economy in which resources are owned and controlled by the government. Economy in which goods and services are produced the way they have always been done. Economy that combines elements of the command and market economies. A market with only one seller. Career abilities that can be adapted to varied work situations, also called soft skills. Economy in which the resources are owned and controlled by the people of the country. A market situation with many buyers and numerous sellers, offering products that are very similar, but not identical. m. The movement of an economy from one condition to another and back again. n. The total value of all final goods and services produced in a country in one year. 33. perfect (pure) competition O. Specialized career training, also referred to as hard skills, needed for a specific profession. 34. personal income p. A phase marked by a long period of high unemployment, weak consumer sales, and business failures. 35. productivity q. Salaries and wages, as well as investment income and government payments to individuals. 36. prosperity r. The GDP divided by the total population of a country. 50 Chapter 1 | Exploring the World of Business and Economics Ministry of Education 2024-1446

37. recession 38. recovery 39. retail sales 40. risk 41. scarcity 42. technical skills S. t. Production output in relation to a unit of input, such as a worker. The phase in which unemployment decreases, demand for goods and services increases, and GDP begins to rise. u. The uncertainty of an event or outcome. V. An increase in the general price level. W. X. The portion of people in the labor force who are not working. The sales of items bought by consumers. y. A period in which unemployment is low, businesses produce many goods and services, and wages are good. 44. unemployment rate Z. A period in which demand, production, and GDP growth decrease and unemployment begins to rise. 43. traditional economy Make Academic Connections 45. Research Dual economies often exist in countries with a modern market economy in urban areas and a traditional economy in rural areas. Select a country and conduct online research to locate contrasting photos of the two economies in that country. What concerns might exist because of the dual economies? 46. Technology Describe ways in which computers and other technology might influence GDP in Saudi Arabia and other countries. وزارة التعليم Ministry of Education 2024-1446 Assessment | 51

47. Geography Select five countries. Create a map showing various economic statistics for each country. Explain reasons for differences among the countries. 48. Science Various scientific developments can result in increased productivity for a business. Research a recent scientific discovery or innovation from a Saudi company. Prepare a poster or other visual to demonstrate how this might increase worker productivity. 49. Economics Why are capital projects important for the success of a company? Select a company, and list the capital projects that would be necessary for its operations. What type of Saudi company might most be in need of capital projects? 50. Communication Describe a business decision situation in which the manager did not make use of appropriate leadership actions. Then, explain what the manager should have done differently. 52 Chapter 1 | Exploring the World of Business and Economics Ministry of Education 52 ليم 2024-1446

51. Culture Around the world, differences exist for greetings, foods, family relationships, decision- making activities, and other cultural elements. Select a country and conduct research about its culture. Prepare a brief report or visual presentation to communicate how these cultural differences might affect business activities when doing business with that country. 52. Communication Prepare a poster or other visual presentation with photos or other visuals from Saudi companies or products that communicate examples of the four types of competition. 53. History Conduct research about hyperinflation. What caused high inflation in various countries? What actions were taken to solve this problem? وزارة التعليم Ministry of Education 2024-1446 Assessment | 53

51. Culture Around the world, differences exist for greetings, foods, family relationships, decision- making activities, and other cultural elements. Select a country and conduct research about its culture. Prepare a brief report or visual presentation to communicate how these cultural differences might affect business activities when doing business with that country. 52. Communication Prepare a poster or other visual presentation with photos or other visuals from Saudi companies or products that communicate examples of the four types of competition. 53. History Conduct research about hyperinflation. What caused high inflation in various countries? What actions were taken to solve this problem? وزارة التعليم Ministry of Education 2024-1446 Assessment | 53

Marketing Strategy A restaurant has been operating for five years and it is located along a major highway near a major city. The restaurant was built during an economic boom and business has grown steadily during the first five years of operation. A recent economic recession has dramatically changed the business environment. Unemployment has increased and the business is down 25% from last year. The prices of menu items at the diner range from 18 SAR to 34 SAR. The restaurant accepts cash and credit cards for payment. The restaurant has advertised in the local newspaper and counted heavily on word-of-mouth advertising. It is open each day Sunday to Friday from 7 a.m. until 9 p.m. You have been hired as a consultant to help the restaurant increase its business. You are challenged to describe the marketing strategy for the restaurant considering its location, menu items and prices, hours of operation, and promotion. Your plan must cover all performance indicators. Performance Indicators Evaluated • Describe the economic impact of a recession on business. Explain customer buying behavior. • Identify a company's unique selling proposition. • Identify product opportunities. • Explain the types of promotion. Think Critically 1. How can the restaurant's location be used to attract customers? 2. What promotions and advertisements might the restaurant use to bring in more customers? وزارة التعليم Ministry of Education 2024-1446 Assessment | 55