Business - Economic Foundations

Question 1

Supply

Answer 1

The amount of a good or service that producers are willing to make and sell

Question 2

Demand

Answer 2

The amount of a good or service that consumers are willing to purchase

Question 3

Mixed Economy

Answer 3

An economy in which there are elements of both public and private enterprise.

Question 4

Innovation

Answer 4

Something new or different introduced.

Question 5

Sole Proprietorship

Answer 5

A business owned and operated by a single person

Question 6

Corporation

Answer 6

A business that exists as its own identity

Question 7

Partnership

Answer 7

A business that is owned and operated by two people

Question 7

Trade agreement

Answer 7

a commercial treaty between two or more nations

Question 8

Equilibrium

Answer 8

The quantity demanded equals the quantity supplied

Question 9

Co-operative

Answer 9

Owned by its workers or members who buy from the business [shareholders]

Question 10

Franchise

Answer 10

When a business licenses another to use its name, operating procedure, etc. under an above form of ownership

Question 11

Profit business

Answer 11

A business that produces or sells goods/services to satisfy the needs, wants, and demands of consumers to make a profit
PROFIT = REVENUE - EXPENSES

Question 11

Non-Profit business

Answer 11

Operate strictly to help people in a community
Raise funds for a specific goal
Serve people/communities
Charities/charitable organizations

Question 12

Crown Corporation

Answer 12

A business regulated by a national or local government but structured and operated as a legal corporation

Question 13

Key Points on Supply

Answer 13

• Represents producers’ willingness to sell
• Affected by price

Question 14

Key Points on Demand

Answer 14

• Reflects consumers’ desires
• Varies with price

Question 15

Key Points on Equilibrium

Answer 15

• Where supply and demand curves intersect
• There is no surplus and no shortage

Question 16

Market-Based Economy

Answer 16

Most goods and services are bought and sold and prices are determined by supply and demand

Question 17

Law of Supply

Answer 17

As the price of a good or service Increase/Decreases the quantity supplied Increases/Decreases

Question 18

What happens when supply shifts?

Answer 18

Shift Right: An increase in supply causes the supply curve to shift to the right, lowering the equilibrium price and increasing the equilibrium quantity
Shift Left: A decrease in supply causes the supply curve to shift to the left, raising the equilibrium price and lowering the equilibrium quantity

Question 19

Law of Demand

Answer 19

As the price of a good or service decreases, the quantity demanded increases.
As the price of a good or service increases, the quantity demanded decreases

Question 20

Stages of the Business Cycle

Answer 20

1. Boom - Major business success and profit
2. Recession - Business is starting to fall
3. Slum/Depression - Many business failures
4. Recovery - The business is coming back

Question 20

What happens when Demand shifts?

Answer 20

Shift Right: An increase in demand causes the demand curve to shift to the right, raising the equilibrium price and quantity
Shift Left: A decrease in demand shifts the demand curve to the left, lowering the equilibrium price and quantity

Question 22

How to meet consumer demands

Answer 22

Pricing strategies, Innovation and Customer Engagement

Question 23

Needs VS Wants

Answer 23

Needs are a necessity for survival and wants are something we’d like to have

Question 24

Profit VS Non-Profit

Answer 24

Profit business wants to make money and income while a non profit wants to serve the community

Question 25

How can a business make profit

Answer 25

Reinvest money for expansion
Provide improved goods and services
Give the owner(s) funds to spend on personal needs or wants