Midterm 1 Flashcards
(110 cards)
Political/Legal Enviroment
taxation employment law environmental regulations industry regulations trade regulations laws health regulation safety regulation consumer protection laws
Economic Environment
economic growth interest rates inflation unemployment consumer confidence disposable income
Sociocultural Environment
demographic lifestyle values taste & preference levels of education
Technological Environment
new discoveries new product potential new communication tech alternative means of providing goods/services gov. expenditure of research
Law of Supply
producers will supply more of a product for sale as its price rises and less as its price drops
Law of Demand
more people will demand a product at a lower price point
Factors of Production
Physical Resources Entrepreneurs Capital Information Resources Labor
Planned Economy
goods/services produced are planned by government in quantity and price at which they are sold. All businesses are state owned and there is no private ownership.
Market Economy
everything is determined by supply and demand. consumers determine what is produced and in what quantity through purchasing. role of government is to encourage free and fair competition between private producers.
Mixed Market Economy
includes elements of market and planned economies. government tends to take over troubled firms that are considered vital to national interests. private companies and government both play important roles.
Market/Equilibrium Price
price at which quantity of goods demanded and quantity of goods supplied are equal
Surplus
when too much of a product is made
Shortage
when not enough of a product is made
Private Enterprises
system that allows individuals to pursue their own interests with minimal government restriction
perfect competition
all firms in an industry must be small and the number of firms in the industry must be large. no single firm is powerful enough to influence price so price is determined by supply and demand. products are very similar. easy for firms to enter or leave market.
monopolistic competition
numerous sellers trying to make product seem different. may be large or small businesses. sellers have more control over prices
oligopy
only a handful of sellers. entry into market is hard (need a lot of capital). have much more control over strategy and pricing.
monopoly
only one producer or dominated by one producer
natural monopoly
one company can most efficiently supply all needed goods and services. where 2 suppliers would be wasteful. like energy companies and power plants.
Aggregate output
total quantity of goods and services produced by an economic system during a given period
standard of living
total quantity and quality of goods and services that people can purchase with the currency used in the economic system
GDP
total value of all goods and services produced within a given period by a national economy through domestic factors of production
GNP
total value of all goods and services produced by a national economy within a given period regardless of where the factors of production are located
Real Growth Rate
growth rate according to GDP not GNP
