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WHS PoBF 5.01A
LAP EC 02
| Term | Definition |
|---|---|
| Cost of goods | The amount of money a business pays for the products it sells or for the raw materials from which it produces goods to sell; the amount of money a business pays for the products (or for any part of the products) it sells |
| Creditors | Individuals or businesses to whom a business owes money or from whom it wants to borrow money |
| Demand | The quantity of a good or service that buyers are ready to buy at a given price at a particular time |
| Economy | The system in which people make and spend their incomes |
| Efficiency | Accomplishing a task with a minimum expenditure of time and effort |
| Expenses | The money that a business spends |
| Gross profit | Money left after the cost-of-goods expense is subtracted from total income |
| Income | The money received by resource owners and by producers for supplying goods and services to consumers |
| Net profit | Money left after the cost-of-goods expense and the operating expense are each subtracted from the total income |
| Operating expenses | All of the expenses involved in running a business |
| Pricing | A marketing function that involves determining and adjusting prices to maximize return and meet customers’ perceptions of value |
| Private enterprise system | An economic system in which individuals and groups, rather than the government, own or control the means of production—the human and natural resources and capital goods used to produce goods and services |
| Profit | Monetary reward a business owner receives for taking the risk involved in investing in a business |
| Profit motive | The desire to make a profit, which moves people to invest in business |
| Resources | Items that are used to accomplish another activity, such as producing/providing goods and services |
| Risk | The possibility of loss or failure |
| Suppliers | Vendors; businesses from which other businesses buy goods or services |
| Taxes | Monies that individuals or businesses must pay to the government |
Created by:
VNelsonWHS
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