lesson 1 - the nature of commerce Flashcards
(17 cards)
what is commerce?
the buying and selling of goods and services between individuals and businesses
define barter.
the exchange of goods or services for other goods or services without money
who are consumers?
individuals that make purchase decisions
list some choices consumers make.
- what to buy
- where to live
- what career to follow
- where to invest
- how much to save
what are goods?
items that you can see or touch
define services
things done for you by others
what are durable goods?
goods that can be used multiple times, e.g., tv
what are non-durable goods?
goods that can only be used once, e.g., bread
what are needs?
things that are necessary for survival
what are wants?
things that are not essential for survival but that we would like to have
define opportunity cost
when you choose to purchase a good or service, you forego the opportunity to buy another
what is price?
the amount of money a consumer is prepared to offer in exchange for a good or service
what are the factors of production?
- land
- labour
- capital
- enterprise
define land in the context of factors of production
resources that occur naturally, such as forests, coal and fertile soil
what does labour include?
both the physical and mental effort of people who are working
what is capital in economic terms?
resources that are goods to make other goods, e.g., a tractor used to produce crops
define enterprise
the ability to combine the other resources of land, labour and capital so as to earn profit
