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the study of how society employs resources to produce goods and services for consumption among various groups and individuals
--allocation of scarce resources |
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| any activity that seeks to provide goods and services--operating at a profit but may not show a profit |
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| person who risks time and money to start and manage a business |
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| the amount of money a business earns above and beyond what it spends for salaries and other expenses |
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| total amount of money a business takes in during a given period by selling goods and services |
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| Amount of goods and services people can buy with the money they have |
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| The general well being of a society in terms of its political freedom, natural environment, education, healthcare, safety, amount of leisure and rewards that adds to personal satisfaction |
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| five factors of production |
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Definition
land
labor
capital
entrepreneurship
knowledge |
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| producing the desired result |
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| producing goods and services using the least amount of resources |
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| the amount of output you generate given the amount of input (ex. hours you work) |
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| key to successful business |
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customer service!
--customers want quality products at a good price |
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| • The statistical study of the population in terms of size, density, and characteristics like age, race, gender, and income |
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Agricultural -> manufacturing -> service [today] -> information-based
-We aren’t growing or making anything we consume anymore – all outsourced
-Everyone providing services for each other
-KEY IS EDUCATION |
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| gross domestic product (GDP) |
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Definition
| Total dollar value of final goods and service produced in a country in a given year |
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| four types of unemployment |
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Definition
frictional
structural
cyclical
seasonal |
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| consumer price index (CPI) |
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Definition
| monthly statistics that measure the pace of inflation or deflation |
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| • The federal government’s efforts to keep the economy stable by increasing or decreasing taxes or government spending |
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• The management of the money supply and interest rates by the Federal Reserve Bank (Fed)
-interest rates
-printing money |
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| • All or most of the land, factories and stores are owned by individuals, not the government, and operated for profit |
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| four basic rights of capitalism |
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Definition
1.The right to own private property
2.The right own a business and keep all that business’ profit
3.The right to freedom of competition
4.The right to freedom of choice |
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| in a free market society, decisions about what and how much to produce are made by... |
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Definition
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Definition
the quantities of products businesses are willing to sell at different prices
o Amount supplied with increase as price increases |
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| the quantities of products consumers are willing to buy at different prices |
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market price—determined by supply and demand, this is the negotiated price
-Crossing point between the two curves—prices tend towards this point |
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| four degrees of competition |
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Definition
perfect competition
monopolistic competition
oligopoly
monopoly |
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| • An economic system based on the premise that some basic businesses, like utilities, should be owned by the government in order to more evenly distribute profits among the people |
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| • An economic and political system in which the government makes almost all economic divisions and owns almost all economic decisions and owns almost all the major factors of production |
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| market largely determines what goods and services are produced, who gets them, and how the economy grows |
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| government largely determines what goods and services are produced, who gets them, and how the economy with grow |
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| largest importing and exporting nation |
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| buying products from another country |
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| selling products to another country |
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| movement of goods and services among nations without political or economic barriers—just a theory; doesn’t truly exist because of restrictions |
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| • The difference between money coming into a country (from exports) and money leaving the country (from imports) plus other money flows |
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| selling products in a foreign country at lower prices than those charged in producing country |
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| when the value of a country’s exports is more than that of its imports |
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| when the value of a country’s exports is less than that of its imports |
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| general rise in the prices of goods and services over time |
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| when the price increases are slowing (inflation rate declining) |
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| prices are declining because too few dollars are chasing too many goods |
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| total value of a nation’s exports compared to its imports measured over time |
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| • When a firm (licensor) provides the right to manufacture its product or use its trademark to a foreign company (licensee) for a free (royalty) |
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| • A contractual agreement whereby someone with a good idea for a business sells other the rights to use the name and sell a product/service in a given area |
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| • A foreign company produces private-label goods to which a domestic company then attaches its own brand name or trademark |
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| • A partnership in which two or more companies join to undertake a major project (short-term) |
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| • A long-term partnership between two or more companies established to help each company build competitive market advantages |
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| multinational cooperation |
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• A company that manufactures and markets products in many different countries and has multination stock ownership and management
-Under same company/brand name |
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| mindset that one's own country/culture is superior to all others |
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The use of government regulations to limit the import of goods and services
-Protecting our companies against foreign competitive
-Affected by political atmosphere between foreign nations |
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Definition
| raise the retail price of imports so domestic goods are competitively priced |
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| raise money for governments; big income source |
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| limits the number of products in certain categories a nation can import |
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Definition
• A regional group of countries with a common external tariff, no internal tariffs and coordinated laws to facilitate exchange among members
-Also called a Trading Bloc
-ex. European Union; NAFTA |
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