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SOM 122 Midterm > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

businesses

A

organizations that provide good or services that are then sold to earn profits

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2
Q

profits

A

revenue - expenses = profit

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3
Q

external environment

A

everything outside of an organizations boundaries that may affect it

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4
Q

domestic business environment

A

the environment which a firm conducts its operations and derives its revenues

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5
Q

global business environment

A

international forces that affect a business

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6
Q

technological environment

A

all the ways by which a firm creates value for their constituents

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7
Q

political legal environment

A

relationship between business and government

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8
Q

socio-cultural environment

A

customs, values and demographic characteristics of the society in which the organization functions

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9
Q

economic environment

A

relevant conditions that exist in the economic system in which a company operates

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10
Q

economic system

A

a nation’s system for allocating its resources among its citizens

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11
Q

factors of production

A

resources used in the production of goods and services; labor, capital, entrepreneurs, physical resources, and informational resources

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12
Q

labor

A

the physical and mental capabilities of people as they contribute to economic production (human capital)

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13
Q

capital

A

funds needs to create and operate a business

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14
Q

entrepreneurs

A

individual who accepts the risks and opportunities involved with creating and operating a new business venture

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15
Q

physical resources

A

tangible items that organizations use in the conduct of their business

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16
Q

information resources

A

data and other information used by a business

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17
Q

planned economy

A

relies on a centralized government to control all of most factors of production to make all or most production and allocation decisions

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18
Q

market economy

A

individuals who control production and allocation decisions through supply and demand

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19
Q

private economy

A

ownership is held by entrepreneurs, individual investors, and other businesses

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20
Q

communism

A

political system in which the government owns and operates all factors of production

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21
Q

market

A

mechanism for exchange between buyers and sellers of a particular good or service

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22
Q

capitalism

A

system that sanctions the private ownership of the factors of production and encourages entrepreneurship by offering profits as an incentive

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23
Q

mixed market economy

A

economic system featuring the characteristics of both planned and market economies

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24
Q

privatization

A

process of converting government enterprises into privately owned companies

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25
socialism
planned economic system in which the government owns and operates only selected major sources of production
26
demand
willingness and ability of buyers to purchase a product
27
supply
willingness and ability of producers to offer a product for sale
28
law of demand
buyers will purchase more of a product as its price decreases buyers will purchase less of a product as its price increases
29
law of demand
producers will offer more of a product as prices increase | producers will offer less of a product as prices decrease
30
demand and supply schedule
assessment of relationships among different levels of demand and supply at different price levels
31
demand curve
graph showing how many units of a product will be demanded at different prices
32
supply curve
graphs showing how many units of a product will be supplied at different prices
33
market price
profit-max price at which quantity of goods demanded and supplied are equal (equilibrium price)
34
surplus
quantity supplied exceeds quantity demanded
35
shortage
quantity demanded exceeds quantity supplied
36
private enterprise
economic system that allows individuals to pursue their own interests without undue government restriction
37
competition
vying among businesses for the same resources or customers
38
natural monopolies
industry in which 1 competitor can most efficiently supply all needed products
39
business cycle
short term pattern of economic expansions and contractions
40
aggregate output
total quantity of products produced by an economic system during a given period
41
standard of living
total quantity and quality of good and services people can purchase with currency in a person's economy
42
Gross Domestic Product (GDP)
total value of all products produced within a given period by a national economy through domestic factors of production
43
Gross National Product (GNP)
total value of all products produced by a national economy within a given period regardless of where factors of production are located
44
Real GDP
GDP adjusted to account for changes in currency values and price changes
45
Nominal GDP
measured in current dollars of with all components valued at current prices
46
purchasing power parity
principle that exchange rates are set so that the prices of similar products in different countries are about the same
47
productivity
measure of economic growth the compass how much a system produces with the resources needed to produce
48
balance of trade
economic value of all products a country exports - economic value of all products it imports
49
+ Balance of Trade
when a country exports more than it imports
50
- Balance of Trade
when a country imports more than it exports
51
national debt
amount of money the government owes its creditors
52
stability
condition in which the amount of money available in an economic system and the quantity of products produced in it are growing at about the same rate
53
inflation
widespread price increases occur throughout an economic system
54
instability
when the amount of money injected into an eon comic system exceeds the increase in actual output
55
consumer price index (CPI)
measure of prices of typical products purchased by consumers living in urban areas
56
unemployment
level of joblessness among people actively seeking work
57
recession
a period during which aggregate output declines
58
depression
prolonged and deep recession
59
fiscal policies
used by a government regarding how it collects and spends revenue
60
monetary polices
used by a government to control the size of its money supply
61
stabilization policy
government economic policy intended to smooth out fluctuations in output and unemployment and stabilize prices
62
requirements for private enterprise
private property rights freedom of choice profits competition
63
Degrees of competition
perfect competition monopolistic competition oligopoly monopoly
64
perfect competition
market/industry characterized by many small firms producing an identical product
65
monopolistic competition
market characterized by many buyers and sellers trying to differentiate their products from those of their competitors
66
oligopoly
market characterized by a handful of usually large sellers with the power to influence the prices of their products
67
monopoly
market where there is only one producer that can therefore set the prices of its products
68
inhibitors of economic growth
balance of trade | unemployment

SOM 122 Midterm (6 decks)

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