Management Chapter 3 Flashcards
What is Economic system?
It distributes nation’s resources among citizens. Economic systems differ depending on who owns and controls the factor of production
what are factors of production?
Factors of production are basic resources businesses use to produce goods and services. Some of them are labour, capital, entrepreneur, national resources and information.
What is command economy?
It is when government controls most or all factors of production and make production decisions
What is market economy?
It is when individuals, producers and consumers make production decision using the mechanism of demand and supply.
what is an output market?
When firms buys the goods and resources from household what supply the resources.
What is input market?
When firms supply goods and services in response to demand of households.
What is oligopoly?
is when an industry only has a handful of large sellers. Entry is very difficult due to large capital investment.
What is Privatization?
Privatization is when government owned business convert to privately owned ones
What is the law of demand?
states that buyers will buy more of the product if price drops.
What is the law of supply?
states that producers will offer more for sale as the price rises.
What is private enterprise?
It allows indivisuals to pursue their own interests with minimal government restrictions. Four essential elements you need are private property rights, freedom of choice, profit and competition.
What is perfect competition?
All the firms in industry are small and the number of firms in industry is large and profits priced by different firms is virtually identical.
