PRELIMS - LESSON 1 Flashcards
(22 cards)
What are the three economics system
Capitalism, Communism, Socialism
economic system inwhich the means ofproduction (land and tangible goods) are owned privately.
CAPITALISM
- the means of production are owned by the society
as a whole. - direct opposite of capitalism.
COMMUNISM
- the state owns only the essential industries like
steel, utilities like water and power, transportation etc. - midway between capitalism and communism.
SOCIALISM
what is the Perfect Economic System Fit for
Entrepreneurship
CAPITALISM
It refers to the economic activity of
a person who ____,____, and ____ the risk of a business
enterprise.
ENTREPRENEURSHIP
STARTS, MANAGES, and ASSUMES
The person who undertakes entrepreneurial activities.
ENTREPRENEUR
The entrepreneur identifies an______, considers
_______________, proceeds to __________, and assumes the _______________.
economic need
offering a business solution
assemble the
resources required
risk of either succeeding or failing
SURVIVING ENTERPRISE ARE
RESPONSIBLE FOR PROVIDING THE
FOLLOWING: (5)
- Products and Services for customers and Producers
- Employment
- Taxes
- Demand for suppliers product and services
- Training facilities for future entrepreneurs
IN THE ATTEMPT TO MAKE PROFITS, THE ENTREPRENEUR PERFORMS THE FOLLOWING SPECIFIC FUNCTIONS: (4)
- To supply the capital of the firm
- To organize production by buying and combining inputs
- To decide on the rate of output, in the light of his expectation about demand
- To bear the risk involved in these activities
WHAT IS THE ENTREPRENEUR’S TASK IN ORDER (3)
1ST STEP: the entrepreneur will gather Land (Natural Resources) + Labor (Human Resources) + Capital (Financial Resources)
2ND STEP: Production Process
3RD STEP: Finished Goods and Services
May be defined as the introduction of a new method, procedure, custom, device, and among others.
INNOVATION
Refers to the process by which the ideas and principles generated from the stage of invention are embodied in
concrete products and techniques.
DEVELOPMENT
Refers to the actual introduction of new products or process
INNOVATION
INNOVATION MAY ALSO VIEWED AS THE
“LAST STAGE” IN AN IMPORTANT
PROCESS CONSISTING OF THE
FOLLOWING:
- INVENTION
- DEVELOPMENT
- INNOVATION
New venture must pass through four major stages before
they mature into successful long term enterprises:
- Prestart up stage
- Startup stage
- Early growth stage
- Late growth stage
The entrepreneur starts to question the feasibility of an idea, product or service.
Seek answers to questions on potential markets, production and financing.
PRE-START UP STAGE
The START UP STAGE consist of five parts
- Formation of the business
- Generation of the necessary capital
- Purchase of facilities and equipment
- Constructing prototype products
- Testing the market
IN THIS STAGE
* This follows after establishing feasibility.
* Activities will be on small scale (selling to limited markets
with limited resources)
* If loses occur, it will naturally be on a limited scale also.
* If it succeeds, it has the option to move to the next stage.
EARLY GROWTH STAGE
it is the final stage before a new venture matures as a
stable enterprise.
* Management is structured, long-term financing is
established, and facilities planning are undertaken.
* The stage where skills of the entrepreneur are less needed.
* The skilled manager takes the center stage.
LATE GROWTH STAGE
WHAT IS THE ECONOMIC REWARD OF THE FOLLOWING FACTORS OF PRODUCTION:
Land
Capital
Labor
Entrepreneur
Rent
Interest
Wages / salary
profits
WHAT IS THE LIMITING FACTOR FOR THE FOLLOWING ECONOMIC REWARDS RECEIVED:
Rent
Interest
Wages / salary
profits
Supply and demand
Industry rates / government mandated rates
Supply and demand legislation
Skill of entrepreneur
