Chapter 1 Flashcards
demand
the quantity of a product that buyers are willing to purchase at each of various prices
productivity
the average level of output per worker per hour
recession
two or more consecutive three-month periods of decline in a country’s GDP
microeconomics
the study of the decisions made by individuals and businesses
macroeconomics
the study of the national economy and the global economy
monetary policies
Federal Reserve (banks) decisions that determine the size of the supply of money in the nation and the level of interest rates
cultural (or workplace) diversity
differences among people in a workplace owing to race, ethnicity, and gender
profit
what remains after all business expenses have been deducted from sales revenue
economy
the way in which people deal with the creation and distribution of wealth
factors of production
resources used to produce goods and services
entrepreneur
a person who risks time, effort, and money to start and operate a business
inflation
a general rise in the level of prices
deflation
a general decrease in the level of prices
unemployment rate
the percentage of a nation’s labor force unemployed at any time
consumer price index (CPI)
a monthly index that measures the changes in prices of a fixed basket of good purchased by a typical consumer in an urban area
business cycle
the recurrence of periods of growth and recession in a nation’s economic activity
nation debt
the total of all federal deficits
competition
rivalry among businesses for sales to potential customers
market price
the price at which the quantity demanded is exactly equal to the quantity supplied
oligopoly
a market (or industry) in which there are few sellers
business
the organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs
free enterprise
the system of business in which individuals are free to decide what to produce, how to produce it, and at what price to sell it
stakeholders
all the different people or groups of people who are affected by the policies and decision made by an organization
economics
the study of how wealth is created and distributed
capitalism
an economic system in which individuals own and operate the majority of businesses that provide goods and services
invisible hand
a term created by Adam Smith to describe how an individual’s personal gain benefits others and a nation’s economy
market economy
an economic system in which businesses and individuals decide what to produce and buy, and the market determine quantities sold and prices
mixed economy
an economy that exhibits elements of both capitalism and socialism
consumer products
goods and services purchased by individuals for person consumption
gross domestic product (GDP)
the total dollar value of all the goods and services produced by all people within the boundaries of a country during a one-year period
producer price index (PPI)
an index that measures prices that producers receive for their finished goods
depression
a severe recession that lasts longer than a typical recession and has a larger decline in business activity when compared to a recession
fiscal policy
government influence on the amount of savings and expenditures; accomplished by altering the tax structure and by changing the levels of government spending
(government’s decision about taxation and spending)
federal deficit
a shortfall created when the federal government spends more ina a fiscal year than it receives
perfect (pure) competition
the market situation in which there are many buyers and sellers of a product, and no single buyer or seller is powerful enough to affect the price of that product
supply
the quantity of a product that producers are willing to sell at each of various prices
monopolistic competition
a market in which there are many buyers along with a relatively large number of sellers who differentiate their products from the products of competitors
product differentiation
the process of developing and promoting differences between one’s products and all competitive products
monopoly
a market (or industry) with only one seller, and there are barriers to keep other firms from entering the industry
natural monopoly
an industry requiring huge investments in capital and within which any duplication of facilities would be wasteful and this not in the public intrest
standard of living
a loose, subjective measure of how well off an individual or a society is, mainly in terms of want satisfaction through goods and services
barter
a system of exchange in which goods or services are traded directly for other goods or services without using money
factory system
a system of manufacturing in which all the material, machinery, and workers required to manufacture a product are assembled in one place
specialization
the separation of a manufacturing process into distinct tasks and the assignment of the different tasks to different individuals
e-Business
the organized effort of individuals to produce and sell through the Internet, or a profit, the products and services that satisfy society’s needs
service economy
an economy in which more effort is devoted to the production of services than to the production of goods
social media
the online interaction that allows people and businesses to communication and share ideas, personal information, and information about products or services
sustainability
meeting the needs of the present without compromising the ability of future generations to meet their own needs
command economy
an economic system in which the government decides what goods and services will be produced, how they will be produced, for who available goods and services will be produced, and who own and controls the major factors of production
