Advanced Business Chapter 2: Entrepreneurs in Market Economy

Réussis tes devoirs et examens dès maintenant avec Quizwiz!

Maslow's Heirarchy of needs

1. physiological needs 2. safety needs 3. love/belonging 4. esteem needs 5. self-actualization

Capital Investment and Job Creation

Business need money to start, create jobs, spur economy

Mixed Economy

Combines elements of command economies and market economies

What to Produce?

Depends on resources available to determine priorities.

Management

Develop, implement, evaluate plans

Traditional Economy

Goods and services produced the traditional way country not yet participating in global economy meet basic needs limited individual wealth, lack of advanced technology

How to Produce?

How to use resources to produce

Law of Diminishing Returns

If one factor of production is increased, others stay the same, the resulting increase(output/product) will level off and decline after some time : must increase multiple factors together.

Factors of Production

Land, labor, and capital; or Natural, Human, Capital the three groups of resources that are used to make all goods and services

US Economy

Market Economy - capitalism: private ownership of resources by individuals, not government. private property freedom of choice profit competition

Monopoly

Only 1 business selling product Consumes have no choice Business cannot easily enter ex: water or electricity company

Economic Decision Making

Process of Choosing which needs and wants will be satisfied

Command Economy

Resources owned and controlled by government Limited Personal choices Prone to corruption

Market Economy

Resources owned, controlled by the people (individuals and businesses) entrepreneurship thrives limited government involvement

3 Economic Questions each country must ask

What to Produce? How to Produce? Whose needs and wants to satisfy? What, How, for Who?

Equilibrium Price

Where supply and demand curve meet, where they equal

Services:

activities provided for the satisfaction of others that are consumed at the SAME TIME as they are PRODUCED. ex: haircut, manicure, lawn moing.

Wants

add to quality and pleasure in life. economic: Material goods/services non economic: exercise, fresh air, happiness

Marketing

attract many customers to boost product in market

Economic Wants

basic of economy: housing, clothing, cars, hair styling medical care.

Supply and Demand

businesses meet demands of consumers, provide supply

self actualization

come with sense of accomplishment, realization of potential.

Economies of Scale

cost ADVANTAGES OBTAINED DUE TO EXPANSION cost of production decreases as more units are produced - increased efficiency with increased production

Variable Costs:

costs go up and down depending on good or service produced expense of buying sugar, changes due to amt bought.

Fixed Costs

costs must be paid regardless of how much product is produced : SUNK Costs MONTHLY RENT SAME More fixed costs that must be paid regardless of sales= higher risks

Production

creates or obtains products for sale (Manufacturers)

Lots of supply: price _______

decreases (cuupplys)

Finance

determine amt of capital needed for business and how obtained

What Needs and Wants to Satisfy?

determine which needs and wants are most important and for whom to satisfy?

Profit

difference between revenues earned and costs of operating

Marginal Costs

disadvantages of producing one additional product or service

Needs are

essential, required to live ex: food clothing shelter

Physiological needs

food, sleep water, shelter air, basic needs

Private Property

free to own anything you want and what do do with it

Social

friends, love, belonging

Trade Off

give up something to have another

Natural disasters impact resources: price _______-

increases (natural)

Lack of Supply (scarcity): Price __________

increases (suppl)

Human Resources

labor, factory workers, manage business

All economic Resources have a _____________ supply

limited same resources used for multiple production competition exists for use or ownership of these resources

Freedom Of choice

make decisions independently

Perfect Competition

market with huge amt of similar business with similar products with MANY BUYERS consumer have more control of market business can easily enter ex: gasoline, agriculture

Monopolistic Competition

market with large amt of business selling diff but similar product "competitive market" business can easily enter all retail stores, food chains, restuarants

Oligopoly

market with small amt of business selling similar products, have majority of sales business CANNOT easily enter ex: airplanes, automobile

Marginal Benefit

measures advantages of producing one additional unit of a product

Capital Resources

money, land, buildings, tools and equipment.

Non Economic Wants

non material things: sunshine, fresh air,exercise, friendship, happiness

Scarcity

people NEEDS and WANTS are UNLIMITED, AND RESOURCES to produce PRODUCTS to meet needs and want are LIMITED

Change Agents

people/ products that change how we live Apple, Microsoft.

Market Structure

perfect competition, monopolistic competition, oligopoly, monopoly

Security

physical safety, economic security

Inelastic demand

price changes, demand does NOT change (minimal change) product is basic need straight line

Competition with similar products:____________ decreases

price decreases (compt)

Functions of Business

production marketing management finance all are dependent on one another

Demand

quantity of good or service a consumer is willing to buy likely to consume more products at lower prices.

Supply

quantity of good or service a producer is willing to produce likely that more supply at higher prices,

esteem

respect and recognition

competition

rivalry among business to sell goods forces business to improve products, keep costs low, provide good customer service,

Economic Resources

the means through which goods and services are produced.

Goods

things you can see and touch tangible

Needs and Wants are

unlimited

Opportunity Costs

value of the next best alternative, that you pass up

Natural Resources

water, land trees, animals, minerals

Demand Elasticity

when demand of product is affected by price curved line


Ensembles d'études connexes

Arkansas Statutes, Rules, and Regs for Life and Health Insurance

View Set

Chapter 1 questions from book and notes

View Set

Chapter 41: Drug Therapy for Diabetes Mellitus

View Set

Chapter 15- Geography (Earth Science)

View Set

Domain 2D: Disclosure Controls: Data Leakage Prevention

View Set