Chapter 1 Flashcards
(16 cards)
Profit is
Revenue less expenses
What is a business
An organization that seeks to earn profit by providing goods and services
Non profit organizations
An organization that provides goods and services but does not seek to make a profit
Economic systems
The way in which a nation allocates its resources around its citizens
Factors of productions are
The resources used to produce a good or service: labour, capital entrepreneurs and natural resources
5 factors of production are
1) natural resources
2) capital
3) human resources (labour)
4) entrepreneurs
5) information resources
Interactions between business and governments
- customers
- competitors
- regulators
- taxation agents
- provider of incentives
- providers of essential services
Market
An exchange process between buyers and sellers of a particular good or service
Capitalism
An economic system in which markets decide what, when and for whom to produce
Mixed market economy
An economic system with elements of both a command economy and a market economy: in practice, typical of most nationals economies
Socialism
A kind of command economy in which the government owns and operates the main industries, while individuals own and operate less crucial industries
Communism
A type of command economy in which the government owns and operates all industries
Command economy
And economic system in which the government control all or most factors of products and makes all or most production decisions
Market economy
An economic system in which individuals control all or most factors of production and make all or most productions decisions
Output markets
Firms supply goods and services in response to demand in the part of the consumer
Input markets
Firms buy resources that they need in the production of goods and services
