Business u2

What affects supply?

- Cost of production - Number of producers - Future prices - Disasters and emergencies - Government - Technology

What affects demand?

- Utility - Buying Power - Prices of other goods and services - Consumers

How to maintain capital goods?

-Maintain the capital good -Change inventory procedures

The desire for goods, services, and resources has made members of societies dependent upon

each other

The process of deciding which goods and services to purchase or provide so that the most satisfaction can be obtained is known as

econamizing

businesses are responsible for

employees, community, company, prod usrs

when natural resources are limited

find anther source find an alt

example of materials (under industrial)

flour for bread, yarn for cloth

The "things" that people buy to satisfy their economic wants are called economic

goods and services

economics

how to meet unlimited wants with limited resources

The functions of relative prices can significantly impact the answers to the three basic economic questions. These functions include

information, incentives, and rationing

Rather than providing goods as trade industries do, ser-vice businesses provide

intangible services

shopping products (under consumer)

items for which the consumer compares several alternatives on criteria such as price, quality, or style

unsought products (under consumer)

items that the consumer does not know about or knows about but does not initially want

specialty products (under consumer)

items that the consumer makes a special effort to search out and buy

convenience products (under consumer)

items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort

example of unsought products (under consumer)

life insurance

Natural resources, human resources, and capital goods are all

limited

Classifications of industrial products

materials, parts, installations, equipment, supplies

example of specialty products (under consumer)

medical services, designer clothes, high-end electronics

financial capital

money

3 types of resources / factors of production

natural, human, capital

without resources

no production

how can human resources become limited

no skill they don rlly wnt to do it

When a choice is made about the best use of resources, the next-best alternative that is given up is called the

opportunity cost

how to keep human resources

pay em more get some trainin

For something to be a economic good it has to

physical, useful, scarce, transferable

The price that a consumer will pay depends on the value

placed on the product, how much money is available to spend, and relative prices

To use scarce resources efficiently, societies must decide what will be

produced, how products will be produced, and how products will be allocated

law of supply

producers offer more of a good as its price increases and less as its price falls

Businesses can be categorized as

producers, trade industries, and service businesses

economic services

productive acts that satisfy economic wants

The values attached to money payments depend on a variety of factors, including:

productivity, demand, availability or supply

consumer products

products purchased by the ultimate consumer

Supply

quantities of an item offered at different possible prices during a specific period of time

Producers may be

raw-goods producers, manufacturers, or builders

Industrial goods and services are meant for

resale, to make other goods and services, to use in operating their business

nonrewable resources

resources that cannot be replaced (fossil fuels)

Trade industries are either

retailers or wholesalers

The gap between limited resources and unlimited wants for goods and services creates

scarcity

example of parts (under industrial)

screw, bolt

wholesalers

sell to other businesses

retailers

sell to ultimate consumers

Because economic resources are limited, produc-ers take a variety of steps to make up for the

shortages

trade industries differ by

size, what they sell, ownership, amount of service, prices, existence of premises

capital goods reflect the state of

technology

quantity demanded

the amount of a good that buyers are willing and able to purchase

quantity supplied

the amount of a good that sellers are willing and able to sells

producers need to choose

the best resources

Social Responsibility

the obligation of a business to contribute to society

ultimate customer

the people who use the products and services purchased for a household

Relative Price

the price of one good in comparison with the price of other goods

Equilibrium price

the price that balances quantity supplied and quantity demanded

capital good

tool, equipment, or other manufactured good used to produce other goods and services; a factor of production

This means that individuals, businesses, and governments must be willing to give up all or part of one thing to get something else.

trade offs

economic services have to

useful, scarce, and transferable.

wants

desires for things that we may or may not actually require

law of supply and demand

A law which states that when supplies of goods and services become plentiful, prices tend to drop. When supplies become scarcer, prices tend to rise.

Inelastic demand

A situation in which an increase or a decrease in price will not significantly affect demand for the product

service businesses

A type of business that performs intangible activities that satisfy the wants of consumers or industrial users

manufacturers

A type of producer that changes the shapes or forms of materials so that they will be useful to customers

raw-goods producers

A type of producer that provides goods in their natural state.

natural resource

Anything in the environment that humans use.

trade industries

Businesses that buy and sell goods to others; retailers and wholesalers

demand

Consumer willingness and ability to buy products

economic want

Desires for items that can only be obtained by spending money

noneconomic want

Desires for things that can be obtained without spending money

example of trade off

For example, some managers may be willing to accept the production of fewer products if workers produce higher-quality products.

elasticity

Is an indication of how changes in price will affect changes in amounts that are demanded and supplied. Consumer demand often changes when prices fluctuate.

Relative prices determine what

Is produced or available for consumers, how products are produced, and who gets the goods and services produced.

economic resources

Items that can be used to produce goods and services

consumers

People who buy and use goods and services.

human resource

People who work to produce goods and services

market research

The activity of gathering information about consumers' needs and preferences.

Price

The amount of money exchanged for a good or service

buyers market

The best time for consumers to buy; characterized by large supply, small demand, and low prices.

sellers market

The best time for producers to sell; characterized by large demand, small supply, and high prices

economic system

The organized way in which a country handles its economic decisions and solves its economic problems

producers

The people who make or provide goods and services

market price

The point where supply and demand are equal

The law of demand

The quantity of a good or service that consumers will buy varies inversely with the price of the good or service. In other words, consumers usually will buy more at lower prices, and less at higher prices.

Installations (under industrial)

These are high-cost, long-lasting items that are used to produce other goods and services. Installa-tions affect the amount of goods and services that a producer can expect to make

materials (under industrial)

These items become part of a finished product after they have been processed.

Parts (under industrial)

These items will become part of a finished product, but they do not need any additional processing.

Supplies (under industrial)

These products are constantly being purchased and used up in the operation of a business. Supplies are usually the least costly type of industrial product.

Equipment (under industrial)

These products are used in the operation of a business but are not used in the actual production of a good or service.

Three basic economic questions

What to produce? How to produce? How will the products be allocated?

substitution affect

a consumer will substitute a cheaper product for a more expensive one

example of shopping products (under consumer)

appliances, bicycles, furniture, stereos, cameras, shoes

Industrial goods and services

all the goods and services that are purchased by producers

Example of convenience products (under consumer)

bread, soft drinks, chewing gum, gasoline, newspapers

examples of installations (under industrial)

building, conveyor belt

The economy depends on consumers and producers

buying and producing goods and services.

Businesses demonstrate social responsibility in two ways

by maximizing their profits and by contributing to public interests

Without raw-goods producers, we wouldn't have

cars, food, etc

builders

constructs

Four economic activities

consumption production exchange distribution

Classifications of consumer products

convenience, shopping, specialty, unsought

The heart of economics is

decision making

Consumers communicate their wants to producers as they purchase or fail to purchase goods and services. In this way, consumers are casting dollar, or economic _____ to let producers know their wants. They are voting for the product that they decide to buy and against the others

votes