AP Business: Introduction to Markets & PESTEL Factors

Vocabulary flashcards covering introductory market concepts, price determination, market accountability, and the PESTEL framework for external business environment analysis.

Competition

The market force that protects both buyers and sellers by preventing sellers from charging excessively high prices when buyers have alternatives, and preventing buyers from offering unreasonable low prices.

Voluntary Exchange

A transaction in a free market where both parties benefit because the buyer values the product more than the money, while the seller values the money more than the product or service.

Coercion

An interaction or exchange that relies on force and violence rather than voluntary free-market participation.

Voting with Dollars

The method by which consumers in a free market hold large corporations accountable by choosing where to spend their money.

Government Bailouts

Interventions that can harm market discipline by eliminating businesses' accountability to their customers and stockholders.

Disadvantages of Capitalism

Market drawbacks identified outside the standard video discussion, specifically environmental damage and the wealth gap.

Business Environment

The external conditions and forces that affect how businesses operate and compete.

External Factors

Influences in the business environment that businesses have little or no control over.

Viability

A business's ability to operate successfully and sustainably over time.

PESTEL

An acronym standing for Political, Economic, Social, Technological, Environmental, and Legal factors used to analyze the business environment.

Political Factors

Government actions, policies, and priorities that influence business activity, including elections, taxes, subsidies, and trade policies.

Tariff

A tax placed on imported goods.

Economic Factors

Conditions related to the overall performance of the economy that affect spending, customer demand, and business activity.

Inflation

A sustained increase in the overall price level of goods and services.

Recession

A decline in economic activity over time.

Social Factors

Cultural trends, demographics, and societal attitudes that influence consumer behavior.

Demographics

Statistical characteristics of a population such as age, income, education level, and location.

Technological Factors

Changes in technology that affect business production, distribution, communication, or innovation.

Automation

The use of technology to perform tasks with minimal human labor.

Environmental Factors

Natural conditions and environmental concerns that influence business operations and demand.

Legal Factors

Laws and regulations that businesses must follow, including minimum wage laws, safety regulations, and consumer protection laws.

Intellectual Property

Legal protection for original ideas, inventions, and creative works, which includes patents, copyrights, trademarks, and trade secrets.