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Introduction to Business > Topic 1 - Understanding Economic Systems and Business > Flashcards

Topic 1 - Understanding Economic Systems and Business Flashcards

1
Q

The nature of a business

A

A business is an organization that strives for a profit by providing goods and services desired by its customers.

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2
Q

Refers to a country’s output of goods and services that people can buy with the money they have.

A

Standard of living

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3
Q

Refers to the general level of human happiness based on such things as life expectancy, educational standards, health, sanitation, and leisure time.

A

Quality of life

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4
Q

The money a company earns from providing services or selling goods to customers.

A

Revenue

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5
Q

Expenses that a company incurs from creating and selling goods and services.

A

Costs

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6
Q

The money left over after all expenses are paid.

A

Profit

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7
Q

Profit

A

Revenue - Costs = Profit

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8
Q

Organization that exists to achieve some other goals than the usual business goal of profit.

A

Not-for-Profit Organizations

Government is the largest not-for-profit group.

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9
Q

Commodities that are useful inputs in their natural state are known as ………. . They include
farmland, forests, mineral and oil deposits, and water.

A

Natural resources

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10
Q

Refers to the economic contributions of people working with their minds and muscles. This input includes the talents of everyone—from a restaurant cook to a nuclear physicist—who performs the many tasks of manufacturing and selling goods and services

A

Labor, or human resources

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11
Q

The tools, machinery, equipment, and buildings used to produce goods and services and get them to the consumer are known as?

A

Capital

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12
Q

Are the people who combine the inputs of natural resources, labor, and capital to produce
goods or services with the intention of making a profit or accomplishing a not-for-profit goal. These people make the decisions that set the course for their businesses; they create products and production processes or develop services. Because they are not guaranteed a profit in return for their time and effort, they must be risk-takers.

A

Entrepreneurs

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13
Q

Refers to the combined talents and skills of the workforce and has become a primary driver of economic growth. Today’s competitive environment places a premium on knowledge and learning over physical resources.

A

Knowledge

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14
Q

Factors of Production: The Building Blocks of Business.

#4

A
  • Natural Resources
  • Labour (Human resources)
  • Entreprenurship
  • Knowlege
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15
Q

External Environment

7

A
  • Economic
  • Political
  • Demographic
  • Social
  • Competitive
  • Global
  • Technological
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16
Q

Three components of political climate

Political and Legal Influences

A
  1. The amount of government activity
  2. Types of laws passed
  3. General political stability of a government.
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17
Q
  • Fluctuations in economic activity create business cycles
  • Government can impact the
    level of economic activity through taxes
    and interest rate levels.
  • Forces of supply and demand determine how prices and quantities of goods and services behave in a free market.
A

Economic Influences

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18
Q

What is the study of people’s vital statistics, such as their age, gender, race, ethnicity, and location.

A

Demography

Demographic factors

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19
Q

……… influence what, how, where and when people purchase products or services.

  • Attitudes
  • Values
  • Ethics
  • Lifestyle
A

Social Factros

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20
Q

The application of science and engineering skills and knowledge to solve production and organizational problems.

A

Technology

21
Q

……….. is the combination of policies, laws, and choices made by its government to establish the systems that determine what goods and services are produced and how they are allocated.

A

Economic system

22
Q

………. is the study of how a society uses scarce resources to produce and distribute goods and services.

A

Economics

23
Q

What are the economic concerns?

A
  • What is produced?
  • How much is produced?
  • How it is produced?
  • For whom is it produced?
24
Q

An economic system based on competition in the marketplace and private ownership of the factors of production; also known as the private enterprise system.

A

Capitalism

25
Q

An economic system characterized by government ownership of virtually all resources, government control of all markets, and economic decision-making by government planning.

A

Communism

26
Q

An economic system in which the basic industries are owned either by the government itself or by the private sector under strong government control.

A

Socialism

27
Q

Economies that use more than one economic system; for example, an economy where the government owns certain industries but others are owned by the private sector.

A

Mixed Economies

28
Q

The subarea of economics that focuses on the economy as a whole by looking at aggregate data for large groups of people, companies, or products.

A

Macroeconomics

29
Q

The subarea of economics that focuses on individual parts of the economy, such as households or firms.

A

Microeconomics

30
Q

An increase in a nation’s output of goods and services. The more a nation produces, the higher its standard of living.

A

Economic growth

31
Q

The total market value of all final goods and services produced within a nation’s borders each year

A

Gross domestic product (GDP)

32
Q

The upward and downward changes in the level of economic activity is called ………

A

Business cycles

33
Q

A decline in GDP that lasts for two consecutive quarters.

A

Recession

34
Q

The condition when all people who want to work can work or have jobs.

Keeping people on the job

A

Full employment

35
Q

The percentage of the total labor force that is not working but is actively looking for work.

Keeping people on the job

A

Unemployment rate

36
Q

Short-term unemployment that is not related to the business cycle.

Types of Unemployment

A

Frictional unemployment

37
Q

Unemployment that is caused by a mismatch between jobs and workers’ skills.

Types of Unemployment

A

Structural unemployment

38
Q

Unemployment that occurs when a downturn in the business cycle reduce demand for labour.

Types of Unemployment

A

Cylical unemployment

39
Q

Unemployment that occurs during specific seasons in certain industries.

Types of Unemployment

A

Seasonal unemployment

40
Q
  • The situation in which the average of all prices of goods and services is rising
  • Inflation’s higher prices reduce purchasing power - the value of what money can buy.

Keeping Prices Steady

A

Inflation

41
Q

Occurs when the demand for goods and services is greater than the supply.

Types of inflation

A

Demand-pull inflation

42
Q

An increase in production costs push up prices of final goods and services.

Types of inflation

A

Cost-push inflation

43
Q

The quantity of goods or services that people are willing to buy at various prices.

A

Demand

44
Q

The quantity of goods and services that businesses will make available at various prices.

A

Supply

45
Q
  • A large number of small firms are in the market
  • The firms sell similar products
  • Buyers and sellers have good information about prices, sources of supply, etc.
  • It is easy to open a new business or close an existing one.

Market structures

A

Perfect competition

46
Q

Market structures

4

A
  • Perfect competition
  • Pure monopoly
  • Monopolistic Competition
  • Oligopoly
47
Q
  • A single firm accounts for all the industry sales
  • The firm is the industry
  • Barriers to entry prevent new firms from competing with the existing firm
A

Pure monopoly

48
Q
  • Many firms are in the market
  • The firms offer products that are close substitutes but still differ
  • It is relatively easy to enter the market.
A

Monopolisitc Competition

49
Q
  • A Few firms produce most or all of the output
  • Large capital requirements or other factors limit the number of firms
A

Oligopoly

Introduction to Business (6 decks)

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