Economic Foundations Flashcards
Demand
The quantity of a good or a service that consumers are willing to purchase at various prices and times.
Supply
The quantity of a good or service that producers are willing and able to sell at various prices and times.
Law of Demand
As the price of a good or service decreases the demand increases
As the price of a good or service increases the demand decreases
Law of Supply
As the price of a good or service increases, the quantity of it also increases
As the price of a good or service decreases, the quantity of it also decreases
Market Equilibrium
The point at which the demand and supply are equal. There is no surplus or shortage
If both demand and supply shift, so does the equilibrium.
The Business Cycle
Covers the economic growth and recession
Boom
High level of consumer purchasing and profits
Prices and costs also tend to rise faster
Unemployment tends to be low
Recession
Falling levels of consumer spending
Lower business profits
Rising unemployment
Slump/ Depression
Very weak consumer spending and business fail
Rising unemployment
Prices start falling
Recovery
Consumers begin to increase their spending
Businesses start to invest again
Unemployment is still high
For-Profit
Produce goods and/or services to satisfy the needs, demands, and wants of consumers to make money/ profit.
Non- Profit
Raise funds for a goal that helps people/ communities (Charitable organization)
Not-for-Profit
Use surplus funds to improve services to it’s members
Does NOT distribute profits back to it’s members
Profit
Income left over after all costs and expenses are paid
Expenses
Payments involved in running the business
Cost
Money required to produce goods/services
Solvent
A business is considered solvent when debts are paid and financial obligations are met.
Sole Proprietorship
Owned by one person
Partnership
Owned by two or more people
Corporation
An artificial person represents the company
Co-Operative
Owned by it’s workers or purchasers of the good/service
Franchise
When a business licenses another to use its name and operating procedure
Channels of Distribution
How a business delivers a good or service
Retail
Telephone Marketing
Catalogs
E-commerce
Marketplace
where producers and consumers come together to buy and sell their goods and services
Scarcity
The limited availability of resources compared to the unlimited wants of consumers
Innovation
Developing new products or services that address emerging consumer trends
(Upgrades)
Scarcity Marketing
Creating a sense of urgency among consumers by highlighting limited availability. (Flash sales, limited-time offers.)
Consumers needs and demands drive WHAT?
Market Demand
Market Forces
The economic factors that influence the behavior of consumers and producers
Driven by supply and demand
Market Forces determine WHAT?
Price levels
Availability
Distribution of goods and services
Monetary Policy
Central banks like the Bank of Canada can influence economic activity
Fiscal Policy
Government spending and taxation can influence economic activity
Globalization
This is when businesses develop international influence. The goal is to drive innovation and reduce prices.
Consumer Confidence
Refers to how optimistic consumers are about the overall state of the economy and their personal financial situation.
High confidence leads to increased spending.
Contemporary Relevance
Efforts towards reconciliation and recognition of Indigenous-owned businesses and partnerships.
Urban Economic Opportunities
Access to diverse job markets
High wages
A great influence of globalization
Rural Economic Opportunities
Dependence on agriculture
Vulnerable to market fluctuations
Examples of Economic Inequality
Wage gaps, employment discrimination, and unequal access to resources.
Historical Disadvantages
Discriminatory policies (Residen. Schools)
Barriers to property ownership, business opportunities, and financial services
Economic factors mostly affected WHO? Why?
marginalized groups because they had lower resilience due to lack of wealth and economic security.
Government Response to Inequality
Policies aimed at economic inclusion and support for rural development
Community-Led Solutions to Inequality
Indigenous economic development corporations
Co-operative business models in rural areas
Advocacy and support networks for marginalized groups
Wants
Things that people would like to have but no not need
Needs
Things that people require to survive
Good
Tangible item that you purchase for money
Service
Action offered by businesses in return for money
What does ‘vote with their feet’ mean?
Consumers will go to another business if a certain one doesn’t give them what they want
Technological Advancements
This refers to innovations and improvements in technology that can change production processes, product offerings, and market dynamics.
