Chapter 1 Flashcards
What is business?
Business is the organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs.
What are business resources?
1) Material resource
2) Human resource
3)Financial resource
4) Informational resource
The ultimate objective of every firm is…
to satisfy the NEEDS of its customers.
Sales Revenue - Expenses = ?
Profit
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 NATIONAL economy and GLOBAL economy.
What are the 4 basic economics questions?
1) WHAT goods and services will be produced?
2) HOW will they be produced?
3) For WHOM will they be produced?
4) WHO owns and controls the major factors of production?
What is CAPITALISM?
An economic system in which individuals own and operate the majority of businesses that provide goods and services.
What is COMMAND ECONOMY?
An economic system in which the GOVERNMENT decides WHAT will be produced, HOW it will be produced, and WHO owns and controls the major factors of production.
What is a Nation’s Productivity?
The average level of output per worker per hour.
What is a Nation’s Gross Domestic Product?
The total value of all goods and and services produced (by all people within the boundaries of a country during a one-year period)
What is Inflation?
A general rise in the level of prices as overflow of investments in the market.
Price goes up, value of money goes down.
What is Deflation?
A general decrease in the level of prices as shortage of circular money in the market.
Price goes down, Value of money goes up.
What is 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.
