Business Lecture Notes Flashcards

Flashcards related to business terms and concepts covered in the lecture notes.

Business

The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society's needs.

Factors of production

Land and natural resources, labor, capital, and entrepreneurship.

Capitalism

An economic system in which individuals own and operate the majority of businesses that provide goods and services.

Invisible hand

Term created by Adam Smith to describe how an individual's own personal gain benefits others and a nation's economy.

Market economy

An economic system in which businesses and individuals decide what to produce and buy, and the market determines prices and quantity sold.

Mixed economy

An economy that exhibits elements of both capitalism and socialism.

Command economy

An economic system in which the government decides what goods and services will be produced, how they will be produced, for whom available goods and services will be produced, and who owns and controls the major factors of production.

Productivity

The average level of output per worker per hour.

Gross domestic product (GDP)

The total dollar value of all goods and services produced by all people within the boundaries of a country during a specified time period, usually a one-year period.

Inflation

A general rise in the level of prices.

Deflation

A general decrease in the level of prices.

Unemployment rate

The percentage of a nation's labor force unemployed at any time.

Consumer Price Index (CPI)

A monthly index that measures the changes in prices of a fixed basket of goods purchased by a typical consumer in an urban area.

Producer Price Index (PPI)

A monthly index that measures prices that producers receive for their finished goods.

Business cycle

The recurrence of periods of growth and recession in a nation's economic activity.

Monetary policies

The Federal Reserve's actions to promote maximum employment, stabilize prices, and increase or decrease interest rates.

Fiscal policy

The government's influence on the amount of savings and expenditures by altering the tax structure and changing the levels of government spending.

Business competition

A rivalry among businesses for sales to potential customers.

Perfect competition

A market situation in which there are many buyers and sellers of a product, and no single buyer or seller is powerful enough to affect the price of that product.

Supply

The quantity of the product that producers are willing to sell at each of various prices.

Demand

The quantity that buyers are willing to purchase at each of various prices.

Market price

The price at which the quantity demanded is exactly equal to the quantity supplied.

Monopolistic competition

A market situation in which there are many buyers along with a relatively large number of sellers.

Product differentiation

The process of developing and promoting differences between a company's products and all competitive products.

Oligopoly

A market situation in which there are few sellers.

Monopoly

A market with only one seller.

Standard of living

A loose, subjective measure of how well off an individual or a society is, mainly in terms of want satisfaction through goods and services.

Domestic system

A method of manufacturing in which an entrepreneur distributed raw materials to various homes, where families would process them into finished goods.

Factory system

A system of manufacturing in which all the materials, machinery, and workers required to manufacture a product are assembled in one place.

Specialization

The separation of a manufacturing process into distinct tasks and the assignment of different tasks to different individuals.

Service economy

An economy in which more effort is devoted to the production of services than to the production of goods.

Social media

Online interaction that allows people and businesses to communicate and share ideas, personal information, and information about products or services.

Sustainability

The ability to create and maintain conditions under which present and future generations can exist in productive harmony and permit fulfilling the social, economic, and other requirements of future and present generations.