Chapter 1 Flashcards
What is 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
What is Cultural (or workplace) Diversity?
differences among people in a workforce owing to race, ethnicity, and gender
What is a Business?
the organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs
What is E-Business?
the organized effort of individuals to produce and sell for a profit, the goods and services that satisfy society’s needs through the facilities available on the Internet
What is a Profit?
what remains after all business expenses have been deducted from sales revenue
What are Stakeholders?
all the different people or groups of people who are affected by an organization’s policies, decisions, and activities
What is Economics?
the study of how wealth is created and distributed
What is Microeconomics?
the study of the decisions made by individuals and businesses
What is Macroeconomics?
the study of the national economy and the global economy
What is an Economy?
the way in which people deal with creation and distribution of wealth
What are Factors of Production?
resources used to produce goods and services
What is an Entrepreneur?
a person who risks time, effort, and money to start and operate a business
What is Capitalism?
an economic system in which individuals own and operate the majority of businesses that provide goods and services
What is the Invisible Hand?
a term created by Adam Smith to describe how an individual’s personal gain benefits others and a nation’s economy
What is a Market Economy?
an economic system in which businesses and individuals decide what to produce and buy, and the market determines quantities sold and prices
What is a Mixed Economy?
an economy that exhibits elements of both capitalism and socialism
What are Consumer Products?
goods and services purchased by individuals for personal consumption
What is a Command Economy?
an economic system in which the government decides what goods and services will be produced, how they will be produced, for whom available goods and services will be produced, and who owns and controls the major factors of production
What is Productivity?
the average level of output per worker per hour
What is the Gross Domestic Product (GDP)?
the total dollar value of all goods and services produced by all people within the boundaries of a country during a specified time period— usually a one-year period
What is Inflation?
a general rise in the level of prices
What is Deflation?
a general decrease in the level of prices
What is the Unemployment Rate?
the percentage of a nation’s labor force unemployed at any time
What is the Consumer Price Index (CPI)?
a monthly index that measures the changes in prices of a fixed basket of goods purchased by a typical consumer in an urban area
What is the Producer Price Index (PPI)?
an index that measures prices that producers receive for their finished goods
What is a Business Cycle?
the recurrence of periods of growth and recession in a nation’s economic activity
What is a Recession?
two or more consecutive three-month periods of decline in a country’s GDP
What is a Depression?
a severe recession that lasts longer than a typical recession and has a larger decline in business activity when compared to a recession
What are Monetary Policies?
Federal Reserve’s decisions that determine the
size of the supply of money in the nation and the
level of interest rates
What is a 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
What is a Federal Deficit?
a shortfall created when the federal government spends more in a fiscal year than it receives
National Debt
the total of all federal deficits
Competition
rivalry among businesses for sales to potential customers
Perfect (or 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
an item that facilitates production and
operations but does not become part of a
finished product
Demand
the quantity of a product that buyers are willing
to purchase at each of various prices
Market Price
the price at which the quantity demanded is
exactly equal to the quantity supplied
Monopolistic Competition
a market situation 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
Oligopoly
a market (or industry) in which there are few sellers
Monopoly
a market (or industry) with only one seller, and
there are barriers to keep other firms from
entering the industry
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
Domestic System
a method of manufacturing in which an
entrepreneur distributes raw materials to various
homes, where families process them into
finished goods to be offered for sale by the
merchant entrepreneur
Factory System
a system of manufacturing in which all the
materials, 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
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 communicate and share ideas,
personal information, and information about
products or services
Sustainability
the ability to maintain or improve standards of
living without damaging or depleting natural
resources for present and future generations
What Are The Types of Factors of Production?
Land & Natural Resources
Labor
Capital
Entrepreneurship
