2ND QUARTER FLASHCARDS
They play a big role in the economy. They determine what kind of products and services to be produced.
Customers
Why is it important that the customers’ feedbacks be acknowledged?
Because they are the basis for product/service development.
The customers’ consumption creates __________ ______.
additional jobs
The economic sources that households bring and these resources are used to make goods and services.
land, labor, capital, and entrepreneurship
These are existing because of households since entrepreneurs also came from households.
Firms
How do households and firms contribute to the economy?
By buying goods and services, paying taxes that are used for government expenditures, and their savings in the banks are the sources of investment.
The level of wealth, comfort, and material goods available to an individual, community, or social class in a certain geographic area.
Standard of living
Why is the standard of living in an area be considered in starting a business?
To determine the target market of the products to sell or services to render.
Who should consume more products to increase productivity in the economy?
Those with more income
Why is our standard of living increase when we produce more products?
Because our consumption does not stop
They are the sources of raw materials used in producing goods/services.
Suppliers
When firms create products/services, there should be someone who…
who will supply the materials
3 Stages of goods/services
Raw material goods, Intermediate goods, and Final goods
Why should the business owners be more in control of the suppliers than the other way around?
Because they are the consumers.
These are entities that act as financial sources of businesses w/ the intention of gaining profits.
Investors
How can savings and investment be related to one another?
When money is increasing, it is good to save it in bank institutions as they inject interest, and it would also help the bank.
The initial capital or money a business needs to facilitate its costs. It is used to put up a business.
Start-up capital
It is used for the expansion of the business, adding to the size of the factory, buying more equipment, or adding laborers.
Add-up capital
Foreign entities invest in local companies.
Foreign Portfolio Investment
Foreign businesses operate/enter the local or domestic markets.
Foreign Direct Investment
They provide basic social services to their citizens like health services, free education, and security.
Government
It is the government’s process of collecting fees from individuals and businesses.
Taxation
Why is taxation the most important role in the government’s process?
So they can provide the service, collect more from the rich and give more to the poor, and it is part of the inherent power of the state.
Government projects funded and operated by private firms or entities.
Public-Private Partnership
What does the government guarantee to their partnered private entity in a PPP?
the value of its investment + a reasonable interest
An entity engaged in commerce and trade, usually has a profit motive.
Business
What primary factors of production does an entrepreneur combine?
land, labor, capital
Knowing it will make you understand what all the information you will need.
Step 1: Identifying the type of business
Loans, investor, etc.
Step 2: Getting the initial capitalization
The most common factors to identify is its accessibility to the suppliers and the amount of traffic that the consumers will experience.
Step 3: Selecting the location of the business
How the owner will run the business.
Step 4: Directing operations and management
Long and short-run adjustments and shutdown/graceful exit.
Step 5: Getting profits/losses
These are important to secure the business.
Functions Of Management
PLANNING
- management sets the firms’ goals & objectives
- drafting the mission-vision statement
- identifying and disseminating specific objectives
ORGANIZING
- creating an organization’s structure
* detailing the jobs, positions, and hierarchy of command in the business
STAFFING
- hiring, training, promoting, firing, & retiring people ; deals with human resource aspects
- develops skills through training and experience
- recognizes and rewards accomplishments
- sanctions errors
DIRECTING/LEADING
- leading and directing the people to achieve the firm’s goals
- ability of the manager to run the business to meet the goals
CONTROLLING
- maintaining and improving the quality of business and the products/services
- quality control, feedbacking of the customers, etc.
