Business Essentials Flashcards
(39 cards)
Command Economies
Communism and socialism
Communism
Government owned and operates
Socialism
Government owns critical industries, individuals own non-critical
Market economies
Economic basis is supply and demand, political basis is capitalism
Capitalism
Encourages private ownership of the factors of production
Operates under the concept of supply and demand
Mixed market economies
Combination of command and market economies
Degrees of competition
Perfect, monopolistic, oligopoly, monopoly
Perfect competition
Many sellers, product is basically identical
Monopolistic competition
Few to many sellers, product is unique to some buyers
Oligopoly competition
Few large supplied, products are similar
Monopoly competition
One producer, unique product
Organizational boundaries
Separate the organization from its environment
Aggregate output
Measure of economic growth
Total quantity of goods/services produced by an economic system during a given period
Productivity
Measure of growth that compares the output of an economic system with the resources that are needed to produce the output
Measuring economic growth
GNP and GDP
GNP
Value of all goods and services produced by a national economy within a given period regardless of production location
GDP
Value of all goods and services produced by a national economy within a given period with domestic factors of production
Balance of trade
Exports - imports
Economic stability
Amount of money available and quantity of goods and services produced are growing at the same rate
Threats to economic stability
Inflation, deflation, unemployment
Types of unemployment
Frictional, seasonal, cyclical, structural
Political-legal environment
Reflects the relationship between business and government
Socio-cultural environment
Customs, values, attitudes and demographic characteristics of the society in which an organization functions
Porters 5 forces model is used to…
Analyze the competitive situation in an industry
