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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
Q

socialism

A

planned economic system in which the government owns and operates only selected major sources of production

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26
Q

demand

A

willingness and ability of buyers to purchase a product

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27
Q

supply

A

willingness and ability of producers to offer a product for sale

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28
Q

law of demand

A

buyers will purchase more of a product as its price decreases
buyers will purchase less of a product as its price increases

29
Q

law of demand

A

producers will offer more of a product as prices increase

producers will offer less of a product as prices decrease

30
Q

demand and supply schedule

A

assessment of relationships among different levels of demand and supply at different price levels

31
Q

demand curve

A

graph showing how many units of a product will be demanded at different prices

32
Q

supply curve

A

graphs showing how many units of a product will be supplied at different prices

33
Q

market price

A

profit-max price at which quantity of goods demanded and supplied are equal (equilibrium price)

34
Q

surplus

A

quantity supplied exceeds quantity demanded

35
Q

shortage

A

quantity demanded exceeds quantity supplied

36
Q

private enterprise

A

economic system that allows individuals to pursue their own interests without undue government restriction

37
Q

competition

A

vying among businesses for the same resources or customers

38
Q

natural monopolies

A

industry in which 1 competitor can most efficiently supply all needed products

39
Q

business cycle

A

short term pattern of economic expansions and contractions

40
Q

aggregate output

A

total quantity of products produced by an economic system during a given period

41
Q

standard of living

A

total quantity and quality of good and services people can purchase with currency in a person’s economy

42
Q

Gross Domestic Product (GDP)

A

total value of all products produced within a given period by a national economy through domestic factors of production

43
Q

Gross National Product (GNP)

A

total value of all products produced by a national economy within a given period regardless of where factors of production are located

44
Q

Real GDP

A

GDP adjusted to account for changes in currency values and price changes

45
Q

Nominal GDP

A

measured in current dollars of with all components valued at current prices

46
Q

purchasing power parity

A

principle that exchange rates are set so that the prices of similar products in different countries are about the same

47
Q

productivity

A

measure of economic growth the compass how much a system produces with the resources needed to produce

48
Q

balance of trade

A

economic value of all products a country exports - economic value of all products it imports

49
Q

+ Balance of Trade

A

when a country exports more than it imports

50
Q
  • Balance of Trade
A

when a country imports more than it exports

51
Q

national debt

A

amount of money the government owes its creditors

52
Q

stability

A

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
Q

inflation

A

widespread price increases occur throughout an economic system

54
Q

instability

A

when the amount of money injected into an eon comic system exceeds the increase in actual output

55
Q

consumer price index (CPI)

A

measure of prices of typical products purchased by consumers living in urban areas

56
Q

unemployment

A

level of joblessness among people actively seeking work

57
Q

recession

A

a period during which aggregate output declines

58
Q

depression

A

prolonged and deep recession

59
Q

fiscal policies

A

used by a government regarding how it collects and spends revenue

60
Q

monetary polices

A

used by a government to control the size of its money supply

61
Q

stabilization policy

A

government economic policy intended to smooth out fluctuations in output and unemployment and stabilize prices

62
Q

requirements for private enterprise

A

private property rights
freedom of choice
profits
competition

63
Q

Degrees of competition

A

perfect competition
monopolistic competition
oligopoly
monopoly

64
Q

perfect competition

A

market/industry characterized by many small firms producing an identical product

65
Q

monopolistic competition

A

market characterized by many buyers and sellers trying to differentiate their products from those of their competitors

66
Q

oligopoly

A

market characterized by a handful of usually large sellers with the power to influence the prices of their products

67
Q

monopoly

A

market where there is only one producer that can therefore set the prices of its products

68
Q

inhibitors of economic growth

A

balance of trade

unemployment

SOM 122 Midterm (6 decks)

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