CHAPTER 1: SUPPLY & DEMAND VOCAB Flashcards

1
Q

Aggregate Output

A

the total quantity of goods and services produced by an economic system during a given period

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2
Q

Balance of Trade

A

the economic value of all products a country exports minus the economic value of all products it imports

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3
Q

Business

A

an organization that provides goods or services to earn profits

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4
Q

Business Cycle

A

short-term pattern of economic expansions and contractions

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5
Q

Capital

A

funds needed to create and operate a business enterprise

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6
Q

Capitalism

A

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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7
Q

Communism

A

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

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8
Q

Competition

A

vying among businesses for the same resources or customers

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9
Q

Consumer Price Index (CPI)

A

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

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10
Q

Demand

A

the willingness and ability of buyers to purchase a good or service

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11
Q

Demand and Supply Schedule

A

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

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12
Q

Demand Curve

A

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

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13
Q

Depression

A

a prolonged and deep recession

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14
Q

Domestic Business Environment

A

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

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15
Q

Economic Environment

A

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

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16
Q

Economic Indicators

A

statistics that help assess the performance of an economy

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17
Q

Economic System

A

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

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18
Q

Entrepreneur

A

businessperson or individual who accepts the risks and opportunities involved in creating and operating a new business venture

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19
Q

External Environment

A

everything outside an organization’s boundaries that might affect it

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20
Q

Factors of Production

A

resources used in the production of goods and services - labor, capital, entrepreneurs, physical resources, and information resources

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21
Q

Fiscal Policies

A

policies used by an environment regarding how it collects and spends revenue

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22
Q

Global Business Environment

A

the international forces that affect a business

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23
Q

Gross Domestic Product (GDP)

A

the total value of all goods and services produced within a given period by a national economy through domestic factors of production

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24
Q

GDP per Capita

A

gross domestic product divided by total population

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25
Q

Gross National Product (GNP)

A

total value of all goods and services produced by a national economy within a given period regardless of where the factors of production are located

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26
Q

Inflation

A

occurs when a widespread price increases occur throughout an economic system

27
Q

Information Resources

A

data and other information used by businesses

28
Q

labor(human resources)

A

physical and mental capabilities of people as they contribute to economic production

29
Q

Law of Demand

A

principle that buyers will purchase (demand) more of a product as its price drops and less as its price increases

30
Q

Law of Supply

A

principle that producers will offer (supply) more of a product for sale as its price rises and less as its price drops

31
Q

Market

A

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

32
Q

Market Economy

A

economy in which all individuals control production and allocation decisions through supply and demand

33
Q

Market Price (Equilibrium Price)

A

profit-maximizing price at which the quantity of goods and supplies are equal

34
Q

Mixed Market Economy

A

economic system featuring characteristics of both planned and market economies

35
Q

Monetary Policies

A

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

36
Q

Monopolistic Competition

A

market or industry characterized by numerous buyers and relatively numerous sellers trying to differentiate their products from those of competitors

37
Q

Monopoly

A

market or industry in which there is only one producer that can therefore set the prices of its products

38
Q

National Debt

A

the amount of money the government owes its creditors

39
Q

Natural Monopoly

A

industry in which one company can most efficiently supply all needed goods or services

40
Q

Nominal GDP

A

GDP measured in current dollars or with all components valued at current prices

41
Q

Oligopoly

A

market or industry characterized by a handful of (generally large) sellers with all the power to influence the prices of their products

42
Q

Perfect Competition

A

market or industry characterized by numerous small firms producing an identical product

43
Q

Physical Resources

A

tangible items that organization use in the conduct of their businesses

44
Q

Planned Economy

A

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

45
Q

Political Legal Environment

A

the relationship between businesses and government

46
Q

Private Enterprise

A

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

47
Q

Privatization

A

process of converting government enterprises into privately owned companies

48
Q

Productivity

A

a measure of economic growth that compares how much a system produces with the resources needed to produce it

49
Q

Profits

A

difference between a business’s revenues and its expenses

50
Q

Purchasing Power Parity

A

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

51
Q

Real GDP

A

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

52
Q

Recession

A

a period during which aggregate output, as measured by GDP declines

53
Q

Shortage

A

situation in which quantity demanded exceeds quantity supplied

54
Q

Socialism

A

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

55
Q

Sociocultural Environment

A

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

56
Q

Stability

A

condition in which the amount of money available in an economic system and the quantity of goods and services produced in it are growing at about the same rate

57
Q

Stabilization Policy

A

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

58
Q

Standard of Living

A

the total quantity and quality of goods and services people can purchase with the currency used in their economic system

59
Q

Supply

A

the willingness and ability of producers to offer a good or service for sale

60
Q

Supply Curve

A

graph showing how many units of a product will be supplied(offered for sale) at different prices

61
Q

Surplus

A

Situation in which a quantity supplied exceeds quantity demanded

62
Q

Technological Environment

A

all the ways by which firms create value for their constituents

63
Q

Unemployment

A

the level of joblessness among people actively seeking work in an economic system