Chapter 1 What is entrepreneurship?

Revenue

Money that an organization receives from the operation of its business.

Venture

A business undertaking that involves a level of risk.

Demand

A consumer's desire to own something and the ability to pay for it.

Business Cycle

A period growth and prosperity (expansion) usually followed by a contraction or slowdown in growth (of a business or state or nation).

Consumer

A person who buys and uses goods and services.

Services

Activities or actions performed by another to you or for you to satisfy needs and wants.

Resources

Also called factors of production, these are commonly grouped into the four categories of labor, physical capital, land or natural resources, and entrepreneurial ability.

Free Enterprise System

An economic system in which individuals depend on supply and demand and the profit margin to determine what to produce, how to produce, how much to produce, and for whom to produce.

Entrepreneur

An individual who undertakes the risk associated with creating, organizing, and owning a business with the desire to make a profit.

Supply

How much of a good or service a producer is willing and able to produce at different prices.

Profit

Income received for entrepreneurial skills and risk taking. It is the money left over after subtracting all expenses from revenue.

Scarcity

Limited quantities of resources to meet unlimited wants; Not having enough resources to satisfy every need.

Want

Products and services that are not necessary to live every day but are desirable to add comfort, ease or enjoyment to one's life.

Need

Something essential to live: food, shelter, clothing, housing, education.

Goods

Tangible items purchased to satisfy needs and wants.

Law of Demand

The concept that people are normally willing to buy less of a product if the price is high and more of it if the price is low.

Law of Supply

The concept that suppliers will normally offer more for sale at higher prices and less at lower prices.

Entrepreneurship

The process of recognizing or creating an opportunity, testing it in the market, and gathering the resources necessary to go into business.

Factors of Production

The resources used to produce goods and services (LAND, LABOR, CAPITAL, AND ENTREPRENEURSHIP) are called...

Economics

The study of how individuals and nations make choices about ways to use scarce resources to fulfill their needs and wants.