front 1 Free enterprise | back 1 Individuals are free to decide what to produce, how to produce it, and at what price to sell it. |
front 2 Business | back 2 The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society's needs. |
front 3 What 4 resources does a business must combine to be successful? | back 3 Human resources Material resources Informational resources Financial resources |
front 4 Human resources | back 4 the personnel of a business or organization. |
front 5 Material resources | back 5 Anything of value or usefulness in the form of material possessions. |
front 6 Informational resources | back 6 provide the background necessary to evaluate current performance and plan future progress |
front 7 Financial resources | back 7 The money available to a business for spending in the form of cash, liquid securities and credit lines |
front 8 Profit | back 8 What remains after all business expenses have been deducted from sales revenue. |
front 9 Negative profit | back 9 results when a firm's expenses are greater than its revenues. |
front 10 Economics | back 10 The study of how wealth (anything of value) is created and distributed. |
front 11 Microeconomics | back 11 The study of the decisions made by individuals and businesses. |
front 12 Macroeconomics | back 12 The study of the national economy and the global economy. |
front 13 Economy | back 13 The system through which a society creates and distributes wealth. |
front 14 4 Factors of Production | back 14 Land and natural resources. Labor Capital Entrepreneurship |
front 15 Entrepreneur | back 15 A person who risks time, effort, and money to start and operate a business. |
front 16 What are the 4 basic economic questions? | back 16 What goods and services produced? How will they be produced? For whom will they be produced? Who owns and controls the major factors of production? |
front 17 Capitalism | back 17 Economic system which individuals own and operate the majority of businesses that provide goods and services. |
front 18 Laissez-fair capitalism | back 18 a society's best interests are served by individuals pursuing their own self-interest. |
front 19 4 Basic assumptions of Laissez-Faire capitalism | back 19 Creation of wealth. Right to own private property and resources. Economic freedom and freedom to compete. Right to limited government intervention. |
front 20 Free Market Economy | back 20 Businesses and individuals decide what to produce and buy; the market determines quantities sold and prices. |
front 21 What type of capitalism occurs in the US? | back 21 Mixed economy with elements of capitalism and socialism. |
front 22 Socialism | back 22 social system or theory in which the government owns and controls the means of production (as factories) and distribution of goods |
front 23 Households and Capitalism | back 23 Consumers of goods and services. Resource owners of some factors of production. |
front 24 Businesses and Capitalism | back 24 Produce goods and services to exchange for revenues (money) Use revenues to purchase factors of production. |
front 25 Governments and Capitalism | back 25 In exchange for taxes, governments provide public services that would not be provided by business or would be produced only for those who could afford them. |
front 26 Command Economies | back 26 Economic systems in which government decides what will be produced, how its produced, who gets what is produced, and who owns and controls the major factors of production. |
front 27 Examples of Command Economies | back 27 Socialism and communism |
front 28 4 factors of socialism | back 28 1. Key industries are owned and controlled by the government. 2. Small-scale private businesses may be permitted and workeds may choose their own occupations. 3. Production based on national goals and distribution is controlled by the state. 4. Intent is the equitable distribution of income, elimination of poverty, social services to all who need them, elimination of the economic waste of captialistic competition |
front 29 Which economic system has key industries owned and controlled by government? | back 29 Socialism |
front 30 Which economic system has production based on national goals and distribution controlled by the state? | back 30 socialism |
front 31 Which economic system's intent is equitable distribution of income, elimination of poverty, social services to all who need them, elimination of economic waste of capitalistic competitiion? | back 31 socialism |
front 32 4 Factors of Communism | back 32 1. All factors of production are owned and controlled by the
government as proxy for ownership by all citizens |
front 33 Which economic system have all factors of production are owned and controlled by the government as proxy for ownership by all citizens? | back 33 Communism |
front 34 Which economic system has Production is based on centralized state planning to meet the needs of the state and not necessarily the needs of its citizens? | back 34 Communism |
front 35 Which economic system has the state dictates occupational choices and sets prices and wages? | back 35 Communism |
front 36 Which economic system's Intent is to create Karl Marx’s concept of a classless society where all contribute according to their ability and receive benefits according to their needs.? | back 36 Communism |
front 37 Productivity | back 37 The average level of output per worked per hour. |
front 38 Gross Domestic Product (GDP) | back 38 The total value of all goods and services produced by all people within the boundaries of a country during a one-year period. |
front 39 7 Ways to measure economic performance | back 39 Productivity Gross Domestic PRoduct (GDP) Inflation Deflation Unemployment Rate Consumer Price Index (CPI) Producer Price Index (PPI) |
front 40 Inflation | back 40 A general rise in the level of prices |
front 41 Deflation | back 41 A general decerase in the level of prices |
front 42 Unemployment rate | back 42 The percentage of a nation's labor force unemployed at any time. |
front 43 Consumer price index (CPI) | back 43 A monthly index that measures the changes in prices of a fixed basket of goods purchased by a typical consumer in an urban area. |
front 44 Producer price index (PPI) | back 44 An index that measures prices that producers receive for their finished goods. |
front 45 7 Ways to Evaluate a Nation's Economic Health | back 45 Balance of trade Bank credit Corporate Profits Inflation Rate National Income New Housing Starts Prime interest rate |
front 46 Balance of Trade | back 46 The total value of a nation’s exports minus the total value of its imports over a specific period of time |
front 47 Bank Credit | back 47 A statistic that measures the lending activity of commercial financial institutions |
front 48 Corporate Profits | back 48 The total amount of profits made by corporations over selected time periods |
front 49 Inflation Rate | back 49 An economic statistic that tracks the increase in prices of goods and services over a period of time; usually calculated on a monthly or annual basis |
front 50 National Income | back 50 The total income earned by various segments of the population, including employees, self-employed individuals, corporations, and other types of income |
front 51 New Housing Starts | back 51 The total number of new homes started during a specific time period |
front 52 Prime Interest Rate | back 52 The lowest interest rate that banks charge their most creditworthy customers |
front 53 Business Cycle Definition | back 53 The recurrence of periods of growth and recession in a nation's economic activity. |
front 54 Recession | back 54 Two or more consecutive three-month periods of decline in a country’s gross domestic product |
front 55 Depression | back 55 A severe recession that lasts longer than a recession |
front 56 Monetary Policies | back 56 Federal Reserve decisions that determine the size of the supply of money in the nation and the level of interest rates |
front 57 Fiscal Policy | back 57 Government influence on the amount of savings and expenditures; accomplished by altering the tax structure and by changing the levels of government spending |
front 58 Federal deficit | back 58 A shortfall created when the federal government spends more in a fiscal year than it receives |
front 59 National debt | back 59 The total of all federal deficits |
front 60 Competition | back 60 Rivalry among businesses for sales to potential customers. |
front 61 Perfect (pure) competition | back 61 Market situation in which there are many buyers and sellers of a product, and NO SINGLE buyer or seller is powerful enough to affect the price of that product. |
front 62 supply | back 62 The quantity of product that PRODUCERS are willing to sell at each of various prices. |
front 63 Demand | back 63 The quantity of a product that BUYERS are willing to purchase at each of various prices. |
front 64 Market Price (Equilibrium) | back 64 The price at which the quantity demanded is exactly equal to the quantity supplied. |
front 65 Monopolistic competition | back 65 Market situation where there are many buyers along with a relatively larger number of sellers who DIFFERENTIATE their products from the products of competitors. |
front 66 Product differentiation | back 66 The process of developing and promoting differences between one's products and all similar products. |
front 67 Oligopoly | back 67 A market situation (in industry) in which there are few sellers. Sizable investments in enter. Each seller has considerable control over price. Market actions of one seller can have strong effects on competitors. |
front 68 Examples of oligolpoly | back 68 automobile manufacturers, car rental agencies, farm implement industries |
front 69 Monopoly | back 69 Market (or industry) with only one seller. |
front 70 Natural monopoly | back 70 An industry requiring huge investments in capital and within which duplication of facilities would be wasteful and thus not in the public interest. Production concentrated in SINGLE firm. |
front 71 Legal monopoly (limited monopoly) | back 71 A monopoly created when a government entity issues a franchise, license, copyright, patent, or trademark protecting the owners of written materials, ideas, or product brands from unauthorized use by competitors specific product or service at a regulated price and can either be independently run and government regulated, or government run and regulated |
front 72 Standard of living | back 72 A loose, subjective measure of how well off an individual or a society is mainly in terms of want satisfaction through goods and services |
front 73 Barter system | back 73 A system of exchange in which goods or services are traded directly for other goods and/or services without using money |
front 74 Domestic system | back 74 A method of manufacturing in which an entrepreneur distributes raw materials to various homes, where families process them into finished goods to be offered for sale by the merchant entrepreneur |
front 75 Factory system | back 75 A system of manufacturing in which all the materials, machinery, and workers required to manufacture a product are assembled in one place |
front 76 Specialization | back 76 The separation of a manufacturing process into distinct tasks and the assignment of the different tasks to different individuals |
front 77 E-business | back 77 the organized effort of individuals to produce and sell through the Internet, for a profit, products and services that satisfy society’s needs |
front 78 Service economy | back 78 an economy in which more effort is devoted to the production of services than to the production of goods |