Chapter 1 Flashcards
Maslow’s hierarchy of needs includes which five levels?
1)physiological
2)safety and security
3)love and belonging
4)esteem
5)self actualization
McClelland’s theory of needs identifies which three human motivators
Need for affiliation
Need for achievement
Need for power
A specific commercial enterprise or establishment that is about fulfilling needs and creating value
Business
The consumer driven quantity of products people are willing to buy at various prices
Demand
The producer driven quantity of products businesses will make available at various prices
Supply
The point on a supply/demand curve where the price supplied and demanded are exactly equal
Equilibrium
The idea that consumers and producers each pursuing their own interests will reach a point where resources are efficiently allocated for all
Adam Smith’s invisible hand
The elements necessary for producers to produce such as land, labor, capital, entrepreneurial spirit
Factors of production
The value that includes all resources - raw materials, time, labor, etc that goes into the production of a product
Cost
The value of how much the product is to be sold or exchanged for on the market
Price
Why might the demand curve shift
Changes in preferences, tastes, income etc
Why might the supply curve shift
Changes in efficiency, technology, cost of raw materials etc
Profit equation
Profit=total revenue-total cost
The money a company receives by providing services or selling goods etc
Revenue= quantity * price
Total cost
Variable costs+fixed costs
Variable cost
Quantity * variable cost per unit
When the money coming in is equal to the money going out
Break even point
Goal of business
Maximize revenue and minimize cost
How can a business increase revenue
Increasing price, quantity or both
Decrease fixed and/or variable costs
An economic system based on competition in the workplace and private ownership of the factors of production
Capitalism
Pros, cons and example of capitalism
Pros- efficiency, innovation
Cons-markets aren’t perfect, negative externalities, inequality
USA
An economic system where government owns virtually all resources, controls markets and makes economic decisions
Communism
Pros, cons, examples of communism
Pros- people in theory are equal
Cons-corruption, lack of individual choice, inefficiency
North Korea
Cuba
An economic system where the basic industries are owned either by the government or within the private sector under strong government control
Socialism
Pros, cons, example of socialism
Pros-equal access education and health care
Cons- high taxes, lack of incentives to innovate, inefficient allocation of resources
Venezuela
A system that takes elements from more than on type of economic system
Mixed market
Pros, cons, example of mixed market
Pros-best if both worlds, minimizes negative externalities, still incentivizes innovation
Cons-government oversight might create inefficiencies
UK, Sweden, France
What are some benefits of government involvement in enterprise
Protects IP
Minimizes negative externalities
Enforces contracts
An economy where the government manages supply and
demand by controlling production, prices, and distribution in accordance with a long-term design and schedule of objectives (communism, socialism)
Planned/Command economy
An economy where goods and services are exchanged in a free market-capitalism
Market economy
