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business chapter 1
test 1
| Question | Answer |
|---|---|
| Business | Organization that provides good and or services to earn profits |
| Profits | difference between a business's revenues and its expenses |
| Consumer Choice/Demand | consumer choice and demand are very important factors of any successful business |
| Opportunity & Enterprise | someone who can spot a promising opportunity and then develop a good plan for capitalizing on it can succeed. |
| Quality of Life | businesses produce most of the goods and services we consume, and they employ most working people. |
| Industrial Revolution | Major mid eighteenth century change in production characterized by a shift to the factory system, mass production, and the specialization of labor |
| Laissez-Faire & Entrepreneurship Era | U.S. banking system began freeing businesses, improvements in transportation,and the rise of entrepreneurs because of the idea of "laissez faire" |
| Production Era | period during the early twentieth century in which U.S. business focused primarily on improving producttivity and manufacturing efficiency. |
| Marketing Era | during this era, business started asking the question of "what do constomers want?", with this idea came advertising and the need to satisfy the costomer. |
| Global Era | Improved communication and transportation in addition to more efficient international methods of producting, distributing and marketing products and services, have combined to open distant marketplaces to businesses as never before. |
| Information Era | fueled by the Internet this era brought a big boost to businesses, it also helped level the playing field between small businesses and large businesses because of the eaze of setting up a website |
| Labor | physical and mental capabilities of people as they contribute to economic production |
| Capital | funds needed to create and operate a business enterprise |
| Entrepreneur | individual who accepts the risks and opportunities involved in creating and operating a new business venture. |
| Physical Resources | tangible items organizations use in the conduct of their businesses |
| Information Resources | data and other information used by businesses |
| What is an Economic System? | A nation’s system for allocating resources among citizens.Assumes resources are scarce thus requiring allocation.Market is mechanism for exchange between Buyer/Seller |
| Planned Economy | economy that relies on a centeralized government to control all or most factors of production and to make all or most ofproduction and llocation decisions. |
| Market economy | economy in which individuals control production and allocation decisions through supply and demand |
| Socialism | planned economic system in which the government owns and operates only selected major sources of production |
| Communism | a system in which the government owns and operates all factors of production,All Economic Decisions Controlled By Government |
| Capitalism | system that sanctions the private ownership of the factors of production and ecourages entrepreneurship by ofering profits as an incetive |
| input market | market in which firms buy resources from supplier households |
| output market | market in which firms supply goods and services in response to demand on the part of households |
| market | mechanism of exchange between buyers and sellers of a particular good or service |
| mixed market economy | economic system featuring characteristics both planned and market economies |
| privatization | process of converting government enterprises into privately owned companies |
| demand | the willingness and ability of buyers to purchase a good or service |
| supply | the willingness and ability of producers to offer a good or sercice for sale |
| surplus | situation in which quantity supplied exceeds quantity demanded |
| shortage | situation in which quantity demanded exceeds quantity supplied |
| Private Enterprise | Economic system that allows individuals to pursue their own interests without undue governmental restriction |
| private property | ownership of the resources used to create wealth is in the hands of individuals |
| freedom of choice | you can sell your labor to any employer you choose, you can also choose which products to buy, and producers can usually choose whom to hire and what to produce. |
| profits | the lure of profits leads some people to abandon the security of working for someone else and to assume the risks of entrepreneurship. |
| competition | if profits motivate individuals to start businesses, competition motivates them to perate those businesses efficiently. |
| perfect competition | market or industry characterized by numerous small firms producing an identical product |
| monopolistic competition | market or industry characterized by numerous buyers and relatively numerous sellers trying to differentiate their products from those of competitors |
| Oligopoly | market or industry characterized by a handful of (generally large)sellers with the power to influence the prices of their products |
| monopoly | market or idustry in which there is only one producer, which can therefore set the prices of its products |
| natural monopoly | industry in which one company can most efficiently supply all needed goods or services |
| Sherman Antitrust Act (1890) and Clayton Act (1914) | laws that forbid many monopolies and regulate prices charged by natural monopolies. |
Created by:
mhalet
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