Business Essentials 2.05

The money that a business spends

• Income

• Profit

• Expense

• Cash

The possibility of loss from human error

• Natural risks

• Human risks

• Economic risks

• Speculative risks

A risk response strategy that involves choosing not to do something that is considered risky

• Delegation

• Competition

• Avoidance

• Profit

The amount of money a business pays for the products it sells or for the raw materials from which it produces goods to sell

• Cost of goods

• Profit

• Competition

• Operating expenses

Money left after the cost of goods expense and operating expense are each subtracted from the total income

• Gross Profit

• Cash

• Net profit

• Competition

Chances of loss that carry with them the possibility of loss or no loss

• Pure risk

• Speculative risk

A risk response strategy that involves trying to reduce the chance of loss or the severity of loss

• Transfer

• Avoidance

• Retention

• Reduction

Monetary reward a business owner receives for taking the risk involved in investing in a business

• Cash

• Profit

• Expenses

• $1000

If a business has a monthly income of $5000 with expenses totaling $3000, what is their profit?

• $8000

• $2000

• $5000

• $15000

The desire to make a profit, which moves people to invest in business

• Profit motive

• Oligopoly

• Business risk

• Competition