Chapter 1 flashcards
Term
Definition
Business
an organization that seeks profit by offering products (goods and services) to satisfy society’s needs
Good
a physical, tangible product that we can see and touch
Service
an intangible product that we experience or use
Quality of life
the general well-being and happiness of people and societies; includes measuring such things as access to healthcare, education, and food
Standard of living
the amount of products available, the wealth of the nation, and lifestyle opportunities
Environmental scan
the process of gathering information about the external environment to determine how it may potentially impact the business’s operations
Economy
the way in which people deal with the creation and distribution of wealth
Economic system
a combination of policies, laws, and choices made by governments
Factors of production
the resources used to create goods and services, including natural resources, capital, labour, entrepreneurship, and knowledge
Market economy
an economic system based on competition in the marketplace in which individuals own and operate the majority of businesses that provide goods and services
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
Mixed economy
an economic system where most land and business are privately owned but with various levels of government involvement
Socialism
an economic system in which infrastructure is owned and controlled by the government
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
the quantity of a product that producers are willing to sell at each of various prices
Equilibrium 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 that differentiate their products from the products of competitors
Demand
the quantity of a product that buyers are willing to purchase at each of various prices
Product differentiation
the process of developing and promoting differences between one’s products and all competitive products
Game theory
used to model the interaction between two or more businesses to determine what will happen if one or more companies take specific actions with regard to changing prices or introducing new products or services
Oligopoly
a market (or industry) in which there are few sellers
Monopoly
a market (or industry) with only one seller and barriers to keep other companies from entering the industry
Recession
two or more consecutive three-month periods of decline in a country’s GDP
Unemployment rate
the percentage of a country’s labour force unemployed at any time; calculated as the number of unemployed divided by the number of people currently in the labour force
Inflation
an economic statistic that tracks the increase in prices of goods and services over a period of time
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 one-year period
Consumer price index (CPI)
a monthly index that measures the changes in the prices of a fixed basket of goods and services purchased by a typical consumer in an urban area
Deflation
an economics statistic that tracks the decrease in prices of goods and services over a period of time
what are the four benefits of Business to society?
Offers valuable goods and services
Providing Employment
Contributing to our standard of living
Imporving quality of life.
Driving innovation and creativity
what are the five factors that impact businesses and consumers?
Political
Economic and comp
Social
Technological
International
what are the economic factors?
Health of the Economy
Economic system
Factors of production
Name the four times of Competition and list the amount of businesses or suppliers
Perfect - Many
Monopolistic - Many
Oligopoly - Few
Monoply - One
what are the five very important concepts for perfect competition to exist? (perfect _)
BIOME
Buyers and sellers have no market impact
identical product
open info to buyers and sellers
market of 1 product
entry is not restricted
what is the primary focus of a company in each type of competition to make profit
perf. - Minimizing production costs.
monopolistic - product differentiation
oligopoly - game theory
monopoly - price maker
How to measure economic performance?
what are the four types of resources Critical for company success ?
material, human, financial, and informational
what are the benefits of business in a society
offering valuable goods and services
providing employment
contributing to the standard of living
Improving quality of life
Driving innovation and creativity
What are the concerns about the impact of business on society?
Health and safety risks (production environment/workers… no enviroment)
Enviromental damage
Community Impacts
What are the five factors of the bsuiness enviroment?
Political (tax agents, regulators, providers of essential services, purchasers, and competitors.)
Economic and Competitive (Size of economy,size of competition)
Social (Change in demographics)
Technological (innovations in productions and distribution, communication, and advertising)
International (*kinda like economic and competitive, but over the globe)
What are the five factors of the bsuiness enviroment?
Political (tax agents, regulators, providers of essential services, purchasers, and competitors.)
Economic and Competitive (Size of economy,size of competition)
Social (Change in demographics)
Technological (innovations in productions and distribution, communication, and advertising)
International (*kinda like economic and competitive, but over the globe)
what are the five important concepts for perfect competition?
- The market is a single product
- No entry restrictions
- Homogeneous product
4.Open market knowledge - market is not impacted by one stakeholder
Name an example of monopolistic competition…
Did you do it?
What is the key strategic consideration in a monopolistic market?
Product differentiation.
what is the key strategic consideration of a oligopoly?
Game theory
How can the health of the economy affect individuals?
The financing for education
ability to get a hob
The amount of interest payable
How can the health of the economy affect Business’s ?
Hiring employees
investing in assets
Launching new products or services (or new markets)
How can the health of the economy affect a government?
Taxes and budgets
fiscal policy
monetary policy
what has a larger timeline a recession or a depression
depression > recession
What is inflation ussually measured by?
the consumer price index
What is the difference between monetary policy and fiscal policy?
Monetary policy manages the money supply (ex. printing), while fiscal manages spending and income.
What are the four different parts of a business cycle?
Expansion, peak, contraction, and trough
