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BUS100 > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

Free Enterprise

A

The system of business in which individuals are free to decide what to produce, how to produce it, and what price to sell it.

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2
Q

Business

A

The organized effort of individuals to produce and sell, for a profit, the products and services that satisfy society’s needs.

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3
Q

Profit

A

What remains after all business expenses have been deducted from sales revenue.

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4
Q

Stakeholders

A

All the different people or groups who are affected by the policies and decisions made by an organization.

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5
Q

Economics

A

The study of how wealth is created and distributed

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6
Q

Microeconomics

A

The study of the decisions made by individuals and businesses

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7
Q

Macroeconomics

A

The study of the national economy and the global economy.

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8
Q

Economy

A

The way in which people deal with the creation and distribution of wealth.

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9
Q

Factors of Production

A

Resources used to produce goods and services

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10
Q

Entrepeneur

A

A person who risks time, effort, and money to start and operate a business

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11
Q

Capitalism

A

An economic system in which individuals own and operate the majority of businesses that provide goods and servics.

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12
Q

Four Factors of Production

A
  1. Land and natural resources’
  2. Labor
  3. Capital
  4. Entrepeneurship
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13
Q

Invisible Hand

A

A term created by Adam Smith to describe how individual’s personal gain benefits others and a nation’s economy.

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14
Q

Laissez-Faire Capitalism

A
  1. Right to create wealth
  2. Right to own private property and resources
  3. Right to economic freedom and freedom to compete
  4. Right to limited government intervention
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15
Q

Mixed Economy

A

An economy that exhibits elements of both capitalism and socialism.

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16
Q

Market Economy

A

An economic system in which businesses and individuals decide what to produce and buy, and the market determines quantities sold and prices.

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17
Q

Consumer Product

A

Goods and services purchased by individuals for personal consumption.

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18
Q

Command Economy

A

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.

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19
Q

Productivity

A

The average level of output per worker per hour.

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20
Q

GDP

A

Gross Domestic Product

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21
Q

Gross Domestic Product (GDP)

A

The total dollar value of all goods and services produced by all people within the boundaries of a country during a one-year period.

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22
Q

Inflation

A

A general rise in the level of prices

23
Q

Deflation

A

A general decrease in the level of prices

24
Q

Unemployment Rate

A

The percentage of a nation’s labor force unemployed at any time.

25
Q

CPI

A

Consumer Price Index

26
Q

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.

27
Q

PPI

A

Producer Price Index

28
Q

Producer Price Index (PPI)

A

An index that measures prices that producers receive for their finished goods.

29
Q

Business Cycle

A

The recurrence of periods of growth and recession in a nation’s economic activity

30
Q

Recession

A

Two or more consecutive three-month periods of decline in a country’s GDP

31
Q

Depression

A

A severe recession that lasts longer than a typical recession.

32
Q

Monetary Policies

A

Federal reserve decisions that determine the size of supply of money in the nation and the level of interest rates.

33
Q

Fiscal policy

A

government influence on the amount of savings and expenditures; accomplished by altering the tax structure and by changing the levels of government spending.

34
Q

federal deficit

A

A shortfall created when the federal government spends more in a fiscal year than it receives.

35
Q

national debt

A

the total of all federal deficits

36
Q

competition

A

rivalry among businesses for sales to potential customers

37
Q

perfect (or pure) competition

A

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.

38
Q

Supply

A

the quantity of a product that producers are willing to sell at each of various prices.

39
Q

demand

A

the quantity of a product tat buyers are willing to purchase at each of various prices

40
Q

market price

A

th price at which the quantity demanded is exactly equal to the quantity supplied.

41
Q

Four Different Types of Competition

A
  1. Perfect
  2. Monopolistic
  3. Oligopoly
  4. Monopoly
42
Q

monopolistic competition

A

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

43
Q

product differentiation

A

the process of developing and promoting differences between one’s products and all similar products

44
Q

oligopoly

A

a market (or industry) in which there are few sellers

45
Q

Monopoly

A

a market (or industry) with only one seller, and there are barriers to keep other firms from entering the industry.

46
Q

natural monopoly

A

an industry requiring huge investments in capital and within which any duplication of facilities would be wasteful and thus not in the public interest.

47
Q

standard of living

A

a loose, subjective measure of how well off an individual or a society is, mainly in terms of want satisfaction through goods and services.

48
Q

barter

A

a system of exchange in which goods or services are traded directly for other goods or services without using money.

49
Q

domestic system

A

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.

50
Q

factory system

A

a system of manufacturing in which all the materials, machinery, and workers required to manufacture a product are assembled in one place

51
Q

specialization

A

the separation of a manufacturing process into distinct tasks and the assignment of the different tasks to different individuals.

52
Q

e-business

A

the organized effort of individuals to produce and sell through the internet, for a profit, the products and services that satisfy society’s needs

53
Q

service economy

A

an economy in which more effort is devoted to the production of services than to the production of goods.

54
Q

sustainability

A

meeting the needs of the present without compromising the ability of future generations to meet their own needs.

BUS100 (3 decks)

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