Introduction Flashcards
What is management?
A range of decisions associated with the allocation, acquisition und integration of resources required to perform an economic activity.
Define “economic activity”
Actions that involve the production, distribution and consumption of goods and services at all levels within a society.
What are the types of needs?
NATURAL NEEDS
product of human biology
VS. SOCIAL NEEDS
product of spiritual self and social interaction with others
-RADICAL
fundamental to society, e.g. justice or freedom
-NON-RADICAL belonging, friendship, etc.
ESSENTIAL/PRIMARY NEEDS
universal
NON-ESSENTIAL/SECONDARY NEEDS
influenced by imitation, fashions, expectations from others
Where do needs come from?
What people aim to achieve (goals), people’s values (important things in their lives)
Primary goods vs?
Non essential goods
Complementary goods?
Need both to satisfy
Substitute goods?
Only need one
Differentiable goods VS
Commodities (cannot differentiate)
What are consumer goods?
Used for final use
What are industrial goods?
Used to manufacture other goods
Disposable goods VS
Durable goods (can use many times)
Goods for individual VS
Collective consumption
Public goods are non excludable and non rivalrous. What do these words mean?
Non excludable: cannot stop others from benefiting from it
Non rivalrous: one individual consuming stops another from consuming the same good
V.V definitions are analogous to
What does economic activity involve?
Technical transformation (physical, spatial eg transportation, logical eg banks), transactions (to buy and sell), complementary/support activities
What is the circular flow model? Describe the movements.
CFM is a chart that shows how money flows.
Flow 1: resource market - money income - households - consumption expenditures - product market - revenue - businesses - costs - resource market
Flow 2:resource market - resources - businesses - products - households - goods and services ( products ) - households - labour, land, capital, entrepreneurship - resource market
Associate the people and the activities in the business.
Management - employees (acquiring and associating resources)
Finance - owners (activities concerned with obtaining money)
Marketing - customers (product, price, place, promotion)
What is the role of the entrepreneur?
To invest money and time into developing a new project.
The goal of a business is…
To earn profit in a sustainable and ethical way.
The role of the government is…
To preserve competition, minimise economic fluctuations and minimise unemployment.
What is a non profit organization?
Private organisations that do not have making profit as their main goal. They are not allowed to distribute assets of profits.
