| A | B |
|---|
| Entrepreneur | An individual who: invents, develops, and distributes a good or provides a service; assumes the risks of starting and building a business; and receives personal and financial rewards for her/his efforts. |
| Private enterprise/free enterprise | An economic system in which individuals and groups, rather than the government, own or control the means of production–the human and natural resources and capital goods used to produce goods and services. |
| Small business | A business that employs 500 or fewer people. |
| Avoidance | A risk-response strategy that involves choosing not to do something that is considered risky. |
| Business risk | The possibility of loss (failure) or gain (success) inherent in conducting business. |
| Cost of goods | The amount of money a business pays for the products it sells or for the raw materials from which it produces goods to sell; the amount of money a business pays for the products (or for any part of the products) it sells. |
| Direct competition | Rivalry between or among businesses that offer similar types of goods or services. |
| Economic risk | The possibility of loss or failure that occurs as a result of the economy. |
| Expenses | The money that a business spends. |
| Gross profit | Money left after the cost-of-goods expense is subtracted from total income (income from sales - cost of goods = gross profit). |
| Human risks | The possibility of loss or failure from human error. |
| Income | The money received by resource owners and by producers for supplying goods and services to customers. |
| Indirect competition | Rivalry between or among businesses that offer dissimilar goods or services. |
| Monopoly | A type of market structure in which a market is controlled by one supplier, and there are no substitute goods or services readily available. |
| Natural risks | The possibility of loss or failure from nature. |
| Net profit | Money left after the cost-of-goods expense and the operating expense are each subtracted from the total income (gross profit - operating expense = net profit). |
| Nonprice competition | A type of rivalry between or among businesses that involves factors other than price. |
| Oligopoly | A market structure in which there are relatively few sellers, and industry leaders usually determine prices. |
| Operating expenses | All of the expenses involved in running a business. |
| Perfect competition | A market structure in which there are many businesses selling a lot of identical products for about the same price to many buyers; also known as pure competition. |
| Price competition | A type of rivalry between or among businesses that focuses on the use of price to attract scarce customer dollars. |
| Profit | Monetary reward a business owner receives for taking the risk involved in investing in a business; income left once all expenses are paid (income – expense = profit). |
| Pure risks | Chances of loss that carry with them the possibility of loss or no loss. |
| Reduction | A risk-response strategy that involves trying to reduce the chance of loss or severity of loss. |
| Regulated monopolies | Monopolies that the government allows to exist legally under controlled conditions. |
| Retention | A risk-response strategy that involves assuming responsibility for the risk rather than transferring it. |
| Speculative risks | Chances of loss that may result in loss, no change, or gain. |
| Transfer | A risk-response strategy that involves moving the impact of a risk to someone or something else. |
