Unit 1 Test Flashcards
An organization that uses productive resources to produce a good and/or service to satisfy consumer needs and wants in exchange for added value, usually in the form of monetary (money) profit
Business
Something that is tangible (in physical nature) and of value
Good
An action performed that is intangible and of value
Service
A necessity
Need
Something one would like to have
Want
The net gain obtained by subtracting expenses
Profit
Total income
Revenue
Total cost a business incurs
Expenses
A business with the purpose of making a profit for their owners
For-Profit
Businesses formed for religious, charitable, educational, governmental, or other purposes
Non-Profit
A basic foundation of the study of economics. Our wants are theoretically unlimited but our resources to meet those wants are limited or scarce
Scarcity
Something that occurs anytime buyers and sellers willingly meet to negotiate and exchange things of value. A way of determining how we organize and distribute our scarce resources to meet our unlimited wants and needs
Market
The wealth and resources of a country or region especially in terms of the production and consumption of goods and services. Generally it will have less or more markets in their composition
Economy
The central authority (government) determines who owns the means to produce goods and services, what to produce, how to produce, and who to produce for.
Socialized Economy
Determined through the interactions of free markets. What to produce is determined by what can make the most value n the economy. Production is done in the most effective way that can generate maximum profit. Sell to whoever will pay the most.
Market Economy
The study of how we deal with scarcity in our world. That is, how we deal with having unlimited wants and limited resources
Economics
The quantity of goods and/or services that consumers are willing and able to buy at various prices.
Demand
The quantity of goods and/or services that producers are willing and able to sell at various prices.
Supply
The point at which a supply curve and a demand curve meet is called the equilibrium
Equilibrium
A business with one owner who gains all of the benefits of the business and assumes all of the risk
Sole Proprietorship
A business owned by a legal entity that is separate from its owner
Partnership
A legal entity that is separate and distinct from its owners. Under the law, they possess many of the same rights and responsibility as individuals. They can enter into contracts, loan, borrow money, sue and be sued, employees own assets, and pay taxes.
Corporation
No separation between the owners personal assets. This means that if the business goes into debt by borrowing money or assets from someone else, and the business can’t get out of debt then the person owed money can take all of their assets.
Unlimited Liability
Shareholders personal assets (house, cash, etc.) are separate from the assets of the corporations. So if the corporation owes money, the shareholders are not personally liable for these losses. This means that they cannot lose their house, car, etc.
Limited Liability
A corporation whose shares are bought and sold on public stock exchange (stock market) corporations enter a stock market with an initial public offering (IPO) they tend to be very large in market size (market cap.)
Public Corporation
A corporation which does not sell shares on a public stock exchange. These corporations often leverage private investors to purchase their shares. These corporations range in size to very small to multinational and massive.
Private Corporation
Created/operated by our Federal Government. These corporations are often created to organize resources that will enhance the public good.
Crown Corporation
An authorization granted by a government or company to an individual or group enabling them to carry out specified commercial activities
Franchise
The willing exchange of goods and/or services for perceived value
Trade
The next most valuable option you have given up when you make an exchange
Opportunity Cost
International trade left to it’s natural course without tariffs, quotas, or other restrictions
Free Trade
A trading partnership based on dialogue, transparency, and respect that seeks greater equity in international trade.
Fair Trade
refers to the process of interactions and integrations among people, companies, and governments worldwide. It encompasses economic, social, and cultural aspects resulting in increased international connectivity. One key to global corporations as it relates to this is the reduction/elimination of trade carriers.
Globalization
Refers to the long-term viability of a community, social institution, or societal practices. It is the idea that humans need to find ways to support life today in ways that allow for future generations to live without harm
Sustainability
This measures the average economic output per person, providing insight into the standard of living and economic health of a country.
GDP Per Capita
