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AU7
1004 AU test 1 2024
| Question | Answer |
|---|---|
| firm | the basic unit of organized production |
| industry | collection of firms that produce the same type of product or service |
| primary production | all industries involved in the cultivation of land, grazing of animals, extraction of raw materials from land to sea |
| Secondary production | includes all industries involved in processing raw materials and producing goods |
| Tertiary production | includes all industries involved in the production of services instead of goods |
| quaternary production | includes all industries involved in the production of services relating to information and communication |
| diseconomies | as output rises, an individual firm's costs rise due to elements outside of its control |
| external economies of scale | as an industry grows, an individual firm's costs fall due to factors outside of its control |
| internal economies of scale | as the scale of output for an individual form increases, a reduction in production costs occurs |
| division of labor | separation of work that individual workers become experts in. |
| Job rotation | moving workers between different duties to reduce risk of boredom and repetitive tasks |
| amalgamation | combination into a single entity |
| barriers to entry | cost and legal factors preventing entry of a new firm into a market |
| cartel | a formal arrangement among firms to enhance power and profits collectively |
| collusion | cooperation among independently owned and controlled firms to limit competition. |
| concentration ratio | percentage of the total sales accounted for the largest four firms in a specific industry |
| countervailing power | groups that exert influence on a firm's decisions |
| exclusive dealing | conditions on the supply if goods and services that limit purchase freedom to choose from other suppliers |
| first–mover advantage | competitive advantage gained by being the first to enter a new market |
| holding company | a company that owns and controls a number of subsidiary companies |
| horizontal integration | a single firm gaining control of one stage of production |
| predatory pricing | a temporary price reduction by a dominant firm to discourage entry into a new industry |
| price discrimination | charging different prices to different customers |
| price leadership | price is set by a dominant firm that all other firms follow |
| resale price maintenance | a supplier specified a minimum price to a reseller |
| vertical integration | a single firm gains control of all stages of production and marketing distribution |
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