AppEco Q3 and Q4 Flashcards
a social science concerned with the explanation & prediction of observed phenomena in the society.
economics
It studies the way in the societies solve the fundamental problems of reconciling the unlimited desires of individuals with scarcity resources, susceptible to numerous alternative uses.
economics
is also an APPLIED SCIENCE because it uses the scientific
method in its explanations, which consists of observing reality & presenting
questions & problems to arrive at the formulation of theories & models.
Economics
As an applied science, it follows a systematic procedure to solve issues &
problems of the society.
economics
Fields of Economics
- Microeconomics
- Macroeconomics
- Studies of markets of good & services.
- Focuses of the behavior of individual in the market.
- Explains how & why these units make economic.
Microeconomics
- Studies the economy as a whole.
- Focuses on aggregate indicators.
Macroeconomics
Economics Agents/Stakeholders: (3)
1 Consumers
2 Producers
3 The Public Sectors
Consume goods & services/offer production factors; Maximize
utility.
Consumers
Produce goods/demand productive factors; Maximize profit.
Producers
Attempt to maximize the well-being of society.
The Public Sectors
Material goods or commodities.
Tangible Goods
When they are in the form of services. Those rendered by
doctors, engineers, & other professionals.
Intangible Goods
Goods for the ultimate consumption of the consumers.
(e.g., toothpaste, bath soap, etc.)
Consumer Goods
Used in the production of other goods & services. (e.g., buildings, machinery, equipment.)
Capital Goods/Industrial Goods
Used to satisfy the basic needs of man. (e.g., food & medicine)
Essential Goods
Goods man may do without, butt may give comfort & satisfaction. (e.g., perfume, cakes, chocolates, expensive cars)
Luxury Goods
Goods which are useful & scarce; with value attached to them & a price has to be paid for their use. If a good is so abundant & it can satisfy everyone’s needs without anybody paying for it, then, that goods if free. The air is free, but the air from an aircon is an economic goods.
Economic Goods
Land is the natural resources available to create supply such as raw materials that comes from the ground. It can be a non-renewable resource; commodities such as oil & gold; & renewable resource, such as timber.
Land as a Factor of Production
Labor is the work done by people: education, skills, & motivation & productivity.
Labor as a Factor of Production
Capital or capital goods are capital – the money that companies used to buy resources; man-made objects like machinery, equipment, & chemicals that are used in production. For example, capital goods include industrial & commercial buildings. A commercial aircraft is an example of a capital good.
Capital as a Factor of Production
Entrepreneurship develops an idea into a business. An entrepreneur combines the other three factors of production to add to supply. The most successful entrepreneurs are innovative & risk-takers. The income entrepreneurs earn its profits.
Entrepreneurship as a Factor Production
Characteristics of Resources
1 Scarcity
2 Multiple Use
3 Partially Replaceable
Insufficient resources to supply all the desires & needs of individuals.
In the production of goods & services;
o there are issues that economics may encounter, these include:
for Land – inadequate land & natural resources; polluted areas; overcrowded spaces;
for Labor – unskilled workforce; mismatch of jobs;
for capital – low quality of equipment/machines; insufficient
fund/capital; &
for entrepreneurship – inadequate training of entrepreneurs; limited opportunity; scarcity of great ideas but many
competitors in the market.
Scarcity
Resources can have more than one possible use. For example, a plot
of land can be used to plant coffee or to build a factory.
multiple use
One resource scan replace another in the production of a good or
service (e.g., replace manual labor with technology).
partially replaceable
The ____ are input combinations in the production of goods & services to make an economic profit for the firms.
factors of production
Factors of production (4)
- land,
- labor,
- capital, &
- entrepreneurship.
they mentioned, the main issues on production include the
products to produce, how to produce these products & for whom to produce the
products & how to make the economy grow. Economics, therefore, is concerned
with the allocation of resources to make the most efficient use of these
resources
Guru. S. (2020)
The Four Basic Economic Problems or Basic Economic Problems of the Country
I. What to Produce?
II. How to Produce?
III. For whom to Produce?
IV. What provision/laws should be made for economic growth?
If there is scarcity of goods in a society, the firms have to make wise decision
on what goods/service should be produced & determine the quantity to be
produced.
what to produce?
For example, which do we produce more, masks or canned goods? But we
need capital goods like machines, or consumer goods like laptops. The society
must decide the type & quantity of good/service to be produced to meet the
immediate needs of the society.
what to produce?
The production of goods or services needs effective methods & processes.
how to produce?
For example, you can produce PPEs using sewing machines; sardines using
aqua resources like fish & land resources like tomatoes. The production
requires more labor & capital investment.
how to produce?
The society would always consider the immediate beneficiary of the goods
for whom to produce?
For example, when we produce masks & PPEs we suppose to produce first
these for the frontliners of COVID Pandemic fight. A society decides on the
distribution of the goods & services among the members of society who need
them the most.
for whom to produce?
A society uses all its resources for current consumption. If a society sues all its
resources, then its production capacity will not increase. The standard of living
of the people & the income of the workforce remain constant until the standard
of living will decline in the future. The society must decide also on the part of
the resources to be saved for future progress.
what provisions/law should be made for economic growth?
seeks to solve the problems on scarcity. This happens
when human wants for goods & services exceed the available supply. In a modern
economy, it is evident that a division of labor happens when people earn income by
specializing in what they produce. They will use that income to purchase the products
they need or want every day (BC Campus 2020).
Applied Economics
Also, in the division of labor, it allows workers & firms to produce more. These are
because: (3)
- a) Agents focus on areas of advantage due to natural factors & skill levels;
- The agents learn & invent;
- The agents take advantage of economies of scale.
Division & specialization
of labor only work when individuals can purchase what they do not produce in
markets. Applied economics then helps you understand the basic problems
facing the world today. It helps you become a well-rounded thinker. & most
importantly, it prepares you to be a good citizen.
the agents take advantage of economies of scale
can be a tool to solve economic problems on the production of
goods & services
Economics
is the process by which resources are transformed into useful
forms.
Production
are things provided by nature that can be used directly or
indirectly to satisfy human needs.
Resources
Strategic options decisions to economize the problems include: (8)
- Economic growth – ability to produce goods & services.
- Reduce Expectation – reduce our wants- lessening consumption
- Improve the use of resources – use our existing resources wisely
- Don’t waste the limited resources
- Productive efficiency
- Allocate efficiency
- Full employment & equity of resources
8.Reduce expectations – Reducing wants
It helps us solve the problem on excess supply and excess demand, and lead
it to a balanced supply and demand. In our needs, we do not want oversupply.
It means wastage of income. For entrepreneurs, it is not efficient if their stocks
or supplies are greater than the actual demand. It is a loss not revenue.
economics
or the amount of good or service consumers are willing to purchase
at each price. If customers cannot pay for it, there is no effective demand.
Demand
is what a buyer pays for a unit of the specific good or service
Price
The total number of units purchased at that price is called the?
quantity demanded
Explains the interaction between the sellers of a product & the buyers. It shows
the relationship between the availability of a particular product & the desire (or
demand) for that product has on its price.
law of supply and demand
If all other factors remain equal, the higher the price
of a good, the fewer people will demand that good.
the law of demand
“The higher the price, the lower the quantity
demanded” and vice versa.
the law of demand
The amount of a good that buyers purchase at a higher price is fewer because as the price of good goes up, the opportunity cost of buying the good also is less. Consumers will avoid buying a product.
the law of demand
For example, if the price of video game drops, the
demand for games may increase as more people
want the games.
the law of demand
Factors Affecting Demand: (4)
- income of buyers
- number of potential buyers
- preferences
- complementary products
The demand curve is always ____ sloping due to the law of diminishing marginal utility.
downward
demonstrates the quantities
that will be sold at a given Price.
the law of supply
“The higher the price, the higher, the quantity
supplied” and vice versa.
the law of supply
Producers supply more at a higher price
because selling at higher quantity at a higher
price increases revenue
the law of supply
For example, if the price of video games
increases, sellers are likely to supply more
games to maximize their profits.
the law of supply
factors affecting supply (6)
- Production Capacity
- Production Costs such as Labor & Materials
- The Number of Competitors
- Ancillary Factors such as Material Availability
- Weather
- Reliability of Supply Chains
says, “as the price of a product increases, companies will produce more of the product.”
The law of supply
When graphics the supply vs. the price, the slope ___
the slope rises
or market-clearing price is the price at which the producer can
sell all the units he wants to produce and the buyer can buy all the units he
wants.
Equilibrium price
if the Supply and demand are balanced, it is in a state of
equilibrium.
In the ____ ____ , the two slopes will intersect. The market price is
sufficient to induce suppliers to bring to market that some quantity of goods
that consumers will be will to pay for at that price.
equilibrium point
A ____ curve shows the relationship between quantity demanded and price
in a given market on a graph.
demand
The law of ____ states that a higher price typically leads to a lower quantity
demanded.
demand
A ____ curve shows the relationship between quantity supplied and price on
a graph.
supply
The ____ says that a higher price typically leads to a higher quantity
supplied.
law of supply
The ____and ____ occur where the supply and
demand curves cross
equilibrium price and equilibrium quantity
The ____ occurs where the quantity demanded is equal to the quantity
supplied.
equilibrium
If the price is ____ the equilibrium level, then the quantity demanded will
exceed the quantity supplied.
below
Excess demand or a shortage will exist. If the price is ____ the equilibrium
level, then the quantity supplied will exceed the quantity demanded.
above
A ____ is when there is an excess demand for the quantity supplied. While
surplus is excess in supply.
shortage
E.g., if there are 10 bottles of water & there are 20 students who want drinking
these, then there will be only 10 students whose demands are met while the
others will not be able to be given anything.
There is shortage in the supply.
If producers make too many bottles of water & consumers cannot by them want
to buy them, ____
there will be surplus.
measures the responsiveness of the quantity demanded or supplied of a good to a change in its price.
Price elasticity
. Elasticity can be described as
a) Elastic (or very responsive)
b) Unit elastic / Inelastic (or not very responsive)
Effects of Change in Demand & Supply (3)
A. Elastic Demand
B. Inelastic Demand
C. Unitary Elasticity
Or supply curve indicates that quantity demanded or supplied respond to price changes in a greater than proportional manner.
A. Elastic Demand
Or supply curve is one where a given percentage change in price will cause a
smaller percentage change in quantity demanded or supplied.
B. Inelastic Demand
Means that a given percentage changes in prices leads to an equal percentage
change in quantity demanded or supplied
C. Unitary Elasticity
Categories of Price Elasticity
According to Agarwal, P. (2018) & Judge, S. (2020), there are four categories of price
elasticity: (4)
1) The Price Elasticity of Demand
2) The Income Elasticity of Demand (YED)
3) Cross Price Elasticity of Demand (XED)
4) Price Elasticity of Supply (PES)
Is the responsiveness of quantity demanded, or how much quantity demanded
changes, given a change in the price of goods or services.
I. The Price Elasticity of Demand
*The mathematical value is negative. A negative value indicates an inverse
relationship between price & the quantity demanded. But the negative sign is
ignored (Judge, S. 2020).
I. The Price Elasticity of Demand
I. The Price Elasticity of Demand (5)
a) Elastic Demand (PED > 1)
b) Inelastic Demand –
c) Unitary Elastic Demand –
d) Perfectly Elastic
e) Perfectly Inelastic
The percentage change in price brings about a more than proportionate change in quantity
demanded.
a) Elastic Demand (PED > 1) –
(coefficient of the elasticity is less than 1), is when an
increase in price causes a smaller % fall in demand.
b) Inelastic Demand –
– When the percentage change in quantity demanded is
less than the percentage change in price, & the
coefficient of the elasticity is less than 1.
b) Inelastic Demand –
e.g., Gasoline has few alternatives; people with cars
consider it as a necessity & they need to buy gasoline.
There are weak substitutes, such as train riding, walking
& buses. If the price of gasoline goes up, demand is very
inelastic. Other Examples: Diamonds, aircon, Iphone,
Cigarettes.
b) Inelastic Demand –
When the percentage change in demand is equal
to the percentage change in price, the product is
said to have ____
c) Unitary Elastic Demand –
– PED or the price elasticity of
demand is 1
– Unitary elastic
A small percentage change in price brings about a
change in quantity demanded from zero to infinity. –
d) Perfectly Elastic –
– the coefficient of elasticity is equal to infinity (∞).
d) Perfectly Elastic –
The PED is = 0 any change in price will not have any
effect on the demand of the product. –
e) Perfectly Inelastic –
– the percentage change in demand will be equal to zero
(0).
e) Perfectly Inelastic –
The midpoint elasticity is less than 1. (Ed < 1). Price reduction leads to
reduction in the total revenue of the firm.
Point Elasticity
The demand curve is linear (straight line), it has a unitary elasticity at the
midpoint. The total revenue is maximum at this point.
Point Elasticity
Any point above the midpoint has elasticity greater than 1, (Ed > 1).
Point Elasticity
The income elasticity of demand is the relationship between changes in
quantity demanded for a good & a change in real income.
II. The Income Elasticity of Demand (YED)
YED = % change in demand, % change in income
II. The Income Elasticity of Demand (YED)
II. The Income Elasticity of Demand (YED) (2)
A. Normal Goods
B. Inferior Goods
Are those goods for which the demand rises as consumer income rises;
positive income elasticity of demand so as consumers’ income rises
A. Normal Goods
YED is positive. As income rises, the proportion spent on cheap goods will
reduce as now they can afford to buy more expensive goods.
A. Normal Goods
E.g., (the demand for units of air-conditioning increases as the income of the
consumer increases & the demand for electric fan decreases).
A. Normal Goods
____ goods: units of air-conditioning; ____ Goods: electric fan
Normal, Inferior
The demand decreases when consumer income rises; demand increases
when consumer income decreases
B. Inferior Goods
Shifts to the left as income rises. YED is negative. As income rises, the
proportion spent on cheap goods will reduce as now they can afford to buy
more expensive goods.
B. Inferior Goods
E.g., the demand for cheap/generic electronic goods (let’s say electric fans –
will fall as people income rises & they will switch to expensive branded
electronic goods (unit of air-conditioning)
B. Inferior Goods
is the effect on the change in demand of one
good as a result of a change in price of related to another product
Cross price elasticity of demand
XED = % change in quantity demanded of good (X), % change in price
of good (Y)
Cross price elasticity of demand
If the value of XED is positive –
substitute goods
If the value of XED is negative –
complements goods
If the value of XED is zero –
two goods are unrelated
The measure of the responsiveness of quantity to a change in price. It is the
percentage change in supply as compared to the percentage change in price
of a commodity.
IV. Price Elasticity of Supply (PES)
o PES = % change in quantity supplied, % change in price
IV. Price Elasticity of Supply (PES)
Determinants of Price Elasticity of Supply (5)
Agarwal, P. (2020) said, price elasticity of supply can be influenced by the following
factors:
- Marginal Cost:
- Time
- No. of Firms:
- Mobility of Factors of Production:
- Capacity:
: If the cost of producing one more unit keeps rising as output
rises or marginal cost rises rapidly with an increase in output,
the rate of output production will be limited. The Price
Elasticity of Supply will be inelastic – the percentage of
quantity supplied changes less than the change in price. If
Marginal Cost rises slowly, supply will be elastic
Marginal Cost
Over time price elasticity of supply tends to become more elastic. The
producers would increase the quantity supplied by a larger percentage
than an increase in price.
Time:
: The larger the no. of firms, the more likely the supply is elastic.
The firms can jump in to fill in the void in supply.
No. of Firms
: If factors of production are movable, the
price elasticity of supply tends to be more
elastic. The labor & other inputs can be
brought in from other location ton
increase the capacity quickly
Mobility of Factors of Production
: If firms have spare capacity, the price elasticity of supply is elastic.
The firm can increase in costs, & quickly with a change in price.
Capacity
A _____ shows the relationship between quantity demanded & price
in a given market on a graph.
demand curve
The law of ____ states that a higher price typically leads to a lower quantity
demanded.
demand
A ____ shows the relationship between quantity supplied & price on a
graph.
supply curve
The law of ____ says that a higher price typically leads to a higher quantity
supplied.
supply
The ____ price & ____ quantity occur where the supply & demand
curves cross.
equilibrium
The ____ occurs where the quantity demanded is equal t the quantity
supplied.
equilibrium
If the price is ____ the equilibrium level, then the quantity demanded will
exceed the quantity supplied.
below
Excess demand or a shortage will exist. If the price is ____ the equilibrium
level, then the quantity supplied will exceed the quantity demanded.
above
____ supply or a surplus will exist. In either case, economic pressures will
push the price toward the equilibrium level.
Excess
Refers to a group of companies that are related in terms of their primary
business activities. In modern economies, there are dozens of different
industry classifications, which are typically grouped into larger categories
called sectors.
Industry
Companies are classified based on their largest source of revenue
Industry
E.g., A car manufacturer may have a financing division, but since most of its
revenue comes from selling cars, it is still classified as an automobile company
Industry
Individual companies are generally classified into industries based on their
largest sources of revenue.
Industry
Types of Industries: (3)
- Primary Sector:
- Secondary Sector:
- Tertiary Sector:
: Uses natural resources (e.g., farming, fishing, mining).
Primary Sector
: Manufacturing & construction (e.g., automobile
production).
Secondary Sector
: Services (e.g., retail, banking, tourism).
Tertiary Sector
is the study of firms, industries, & markets. It aims to
aid businessmen & economists in their decision-making in areas such as
research & development, target markets, & advertising strategies. An issue in
industrial economics is assessing how competitive a market is.
Industrial Economics
This field examines how businesses compete & how market structures shape
industries.
Industrial Economics
Is identified as the prime motivator of economic activity. Buyers compete to
gain the benefit of a good or service, just as sellers compete to earn profit.
Competition is the regulator of economic activity, ensuring that sellers provide
high-quality goods at reasonable prices
Self-Interest
E.g., The ‘Piso Fair’ of Cebu Pacific Air. Sellers perform services for customers
our of their vested self-interest, not out of kindness or generosity. They gain
something from their accomplishment of a service for the customer,
demonstrating the importance of self-interest in economic activity
Self-Interest
Self-interest does not necessarily imply greed or immoral behavior. It’s simply
seeking out one’s goals. It’s not greed to want to put food on the table for your family.
It’s not greed for wanting to provide for you loved ones & for one’s self. Self-Interest
becomes greed if it becomes ____.
excessive
5 Principles in the Formation of Competitive Markets
- The Profit Motive
- The Principle of Diminishability
- The Principle of Rivalry
- The Principle of Excludability:
- The Principle of Rejectability:
: Profits are earned when firms gain revenue which exceeds the costs of production. Additional studies in economics identified to two types of profit. First is Normal Profit. Normal profit happens when revenues equal costs. Second is Supernormal Profit. This happens when revenues
exceed costs.
(Firms earn profit when revenue exceeds cost)
The Profit Motive
: This is the diminishing of stocks of goods
as the good is continuously purchased. Prices will be
driven upward for it shall follow the Law of Demand where
a product’s price increases as it nears depletion of it stocks.
Higher prices create an incentive for the producers to
increase production.
(As goods are bought, stocks decrease, raising prices)
The Principle of Diminishability
: Consumers are forced to compete with obtain the
benefit of the good or service. It’s related to the Principle of
Diminishability & it’s another way to explain how
consumers compete when stocks of a good nears
depletion.
(Consumers compete to obtain goods)
The Principle of Rivalry
: This is the exclusion of consumers from
gaining the benefit of a product. This is necessary to
prevent free-riders. Free-Riders are people who enjoy free
stuff & will only consume free stuff even if they can do a
purchase. These are the people who are unwilling to pay
or sometimes are unable to pay. Free-Riders can prevent
the formation of fully fledged markets.
(Prevents free-riders from benefiting without paying)
The Principle of Excludability
Consumers can reject goods if they do not
need nor want them. A shopper in a supermarket may not
pay for a product in his/her shopping basket if she does not need nor want it. & supermarket workers cannot expect for
a shopper to pay for a product they placed in her basket if
the shoppers does not need nor want it.
(Consumers can refuse unwanted goods)
The Principle of Rejectability:
Is best defined as the organizational & other characteristics of a market. We
focus on those characteristics which affect the nature of competition & pricing
Market Structures
Traditionally, the most important features of market structure are: (7)
- The no. of firms
- The market share of the largest
- The nature of costs
- The degree to which the industry is vertically integrated
- The extent of product differentiation
- The structure of buyers in the industry
- The turnover of customers
There are six market structures: (6)
- Pure Competition,
- Monopolistic Competition,
- Oligopoly,
- Monopoly,
- Monopsony
- Duopoly
Or Perfect Competition, is a market structure where buyers consumers dictate
prices due to profit motives. Producers or sellers produce generic products,
making them homogenous & perfect substitutes for others. E.g., rice farmers
produce the same product, rice. This type of competition is crucial in the market
structure.
I. Pure Competition
Or Imperfect Competition, occurs when multiple sellers act independently,
producing homogenous products that can be perfect substitutes of one
another, as seen in the bath soap industry.
II. Monopolistic Competition
The oil industry in the Philippines has a price agreement among its sellers, with
many buyers & few independent sellers. The products are perfect substitutes,
& the price range is influenced by the chief players. This ensures that prices
remain consistent & competitive.
III. Oligopoly
This happens when there are many buyers & only one seller. There are no
eligible substitutes for the product that they sell. The seller here normally
dictates the price. Only the government can intervene here through laws &
regulation. An example of this is the Electric industry. Meralco is the sole seller
of the Electricity here in Metro Manila.
IV. Monopoly
This happens when there are many sellers but there is only one buyer of that
product. This market structure is quite rare. An example of this is the
relationship of Meralco to the Power Producers. Meralco is the sole buyer of
Electricity here in Metro Manila.
V. Monopsony
In this market structure, there are many buyers & only two sellers. This is
observed in the Philippines in the potable water industry in Metro Manila.
Metropolitan Waterworks & Sewerage System (MWSS), & Maynilad Water
Services Inc. are the two major sellers of potable water.
VI. Duopoly
____ markets have Product Homogeneity & Perfect
Information, where all firms’ products are perfect substitutes. Perfect
Information provides all relevant information about products & market
functioning
Pure/Perfect Competition
____ markets have Product
Differentiation & Selective Information, where sellers heavily differentiate
products. Selective Information is when sellers don’t provide all necessary
information about the product. Advertising plays a crucial role in this type of
market, where sellers compete for consumer attention & often focus on product
traits rather than negative effects.
Monopolistic/Imperfect Competition
Economic activity combining four factors of production to produce goods &
services satisfying consumers involves business firms converting inputs into
outputs, thereby converting inputs into satisfying outputs.
production
The ____ include Land, Labor, Capital, & Entrepreneurs,
which are combined to create products that satisfy human needs & wants. A
product is anything that can be offered to the market & can satisfy a need or
want, ensuring its availability & satisfaction.
factors of production
Three kinds of products:
- Goods –
- Services – .
- Ideas –
These are tangible products
- Goods –
These are intangible products butt are experienced.
- Services –
These are intangible products but they indirectly satisfy a
person.
- Ideas –
The ____ is a systematic
approach to product processing,
involving the use of various resources
to create a final product. It involves
three parts: Inputs (raw materials
used for production), Process
(phases of raw materials required for
finalization), & Output (final product).
Inputs refer to the raw materials used
for the production process, while Process involves the final product. Some production
processes may result in byproducts beyond the desired final product.
IPO process
Refers to the natural resources. This also refers to our environmental
resources like clean air & potable water.
Land
This refer to the physical & mental abilities used in the production of goods &
services.
II. Labor
These are the goods that are used in the production of other goods & services.
These include machines, buildings, factories, roads, & the like.
III. Capital
These are the ideas that are used in the production process. This involves the
efforts of the person or persons in incorporating Land, Labor, & Capital
resources for the creation or production of new goods & services.
IV. Entrepreneurship
Factors of Production
(4)
- land
- labour
- capital
- entrepreneurship
– This type of technology uses more labor resources than capital in
production, focusing on manpower over machines & equipment.
An example is the agricultural sector, where human effort is valued
more than machinery.
(manual farming)
Labor Intensive
– ____ industries, such as oil production, refining,
telecommunications, & transports, use more capital resources
than labor in the production process, utilizing more machines &
equipment.
(machines, automation)
Capital Intensive
: An example of this is land.
- Fixed Capital
: This is continuously used but for only one usage i.e. gas
- Circulating Capital
: These are raw materials that are to be used to produce
the final product.
- Productive Capital
This is capital used not for the purpose of production but
for other purposes as the entrepreneur wishes.
- Lucrative Capital:
: This is capital used for the purchase of finished goods
for use in the production process.
- Consumption Capital
: These are the machines or equipments that are or can be used
many times.
- Free Capital
: This is capital to be used for a specific & specialized
purpose.
- Specialized Capital
: An example of this are seeds.
- Agricultural Capital
This refers to heavy equipments & buildings.
- Industrial Capital:
: This refers to mobile vehicles used all throughout the
production process
- Commercial Capital
: This refers to anything sued in the production in monetary
form.
- Financial Capital
Is an individual who runs a small business, taking on the risky & rewards of a
venture, idea, or good or service offered for sale. They are often seen as
business leaders & innovators, playing a crucial role in any economy.
Entrepreneurs have the skills & initiative to bring good ideas to market & make the right decisions to make the idea profitable. The reward for the risks taken
is the potential economic profits the entrepreneur could earn.
Entrepreneur
In the production process, ____ input their ideas, properties, time, &
talents, utilizing other factors to create a satisfying good or service. They
decide on products, materials, processes, & technology type. Decisions in
production are based on the ability to vary the quantity of inputs, which are
fixed & variable. In the short run, there is at least one fixed input, requiring
changes in output to be made through variable inputs. In the long run, all inputs
are considered variable for a period of time.
entrepreneurs
