Introduction to Economics

This set of flashcards covers key terms and concepts from the lecture notes on economics.

What is revenue in an economic context?

Revenue is all money coming in.

How is profit calculated?

Profit is calculated as Revenue minus expense.

What does productivity refer to?

Productivity refers to the amount of output produced.

What is a loss in economic terms?

A loss occurs when revenue minus expense equals negative money.

What is the relationship between risk and profit?

Higher risk often leads to higher potential profit.

Who is considered a stakeholder?

A stakeholder is anyone and everyone affected by a company.

What does macroeconomics study?

Macroeconomics studies the economy on a nationwide or country level.

What does microeconomics study?

Microeconomics studies individuals, households, and firms' decisions on how to allocate resources.

What does microeconomics study?

Microeconomics studies individuals, households, and firms' decisions on how to allocate resources.

What is capitalism?

Capitalism is an economic system where private individuals or businesses own capital goods. The production of goods and services is based on supply and demand in the general market—rather than through central planning—and is known as a market economy.

What is capitalism?

Capitalism is an economic system where private individuals or businesses own capital goods. The production of goods and services is based on supply and demand in the general market—rather than through central planning—and is known as a market economy.

What is socialism?

Socialism is an economic and political system in which the community as a whole owns and controls the means of production (such as factories and farms). It emphasizes collective ownership and often central planning of the economy to achieve a more equitable distribution of wealth and resources.

What is a command economy?

A command economy is an economic system where the government, rather than the free market, determines what

How is price determined

supply and demand

What is a Monopoly?

A monopoly is a market structure characterized by a single seller or producer controlling the entire market for a product or service with no close substitutes, giving them significant control over prices.

What is monopolistic competition?

Monopolistic competition is a market structure in which many companies offer similar, but not identical, products. Key characteristics include many sellers, differentiated products, easy entry and exit, and some control over price.

What is inflation?

Inflation is the rate at which the general level of prices for goods and services is rising, and consequently, the

What is the balance of trade?

The balance of trade is the difference between a country's total value of exports and its total value of imports over a specific period. It is a major component of the balance of payments.

What is an import?

An import refers to a good or service brought into one country from another.

What is an export?

An export refers to a good or service sent from one country to another for sale.

What is Direct Investment?

Direct investment refers to an investment made by a company or individual in one country into business interests located in another country, in the form of either establishing new business operations or acquiring controlling interests in existing foreign companies.

Who is a whistleblower?

A whistleblower is a person who exposes any kind of information or activity that is deemed illegal, unethical, or not correct within an organization.

What is a consumer right?

Consumer rights are legal protections that ensure consumers can purchase goods and services safely and fairly. They include rights to

What is a consumer right?

include rights to safety, informed, choose, and be heard

What is insider trading?

Insider trading refers to the illegal practice of using confidential, non-public information about a company to make profits from buying or selling its stock or other securities.

What is a Sole Proprietorship?

A sole proprietorship is an unincorporated business owned and run by one individual who is solely responsible for all

What is a Partnership?

A partnership is a business owned by two or more individuals who agree to share in its profits or losses. Partners are generally personally liable for the debts and obligations of the business.

What is an LLC?

An LLC (Limited Liability Company) is a business structure that protects its owners from personal responsibility for its debts or liabilities. It combines elements of partnerships or sole proprietorships with the limited liability of a corporation.

What is an S Corp?

An S Corp (S corporation) is a special type of corporation created through an IRS tax election. It allows profits and losses to be passed directly to the owner's personal income without being subject to corporate tax rates, avoiding double taxation. It retains the limited liability protection of a traditional C Corp.

What is a C Corp?

A C Corp (C corporation) is a legal entity that is separate from its owners. It can be taxed, sued, and enter into contractual agreements. C corporations are subject to corporate income tax on their profits, and shareholders are taxed again when they receive dividends, leading to what is known as double taxation. However, they offer limited liability to owners and unlimited growth potential.

What is a Merger?

A merger is the combination of two or more companies into a single new entity. It typically occurs when two companies agree to combine their operations, assets, and liabilities to form one larger company. Mergers are distinct from acquisitions, where one company takes over another.

What is an Acquisition?

An acquisition is when one company purchases most or all of another company's shares to gain control of that company. Unlike a merger, where two companies combine to form a new entity, in an acquisition, the acquired company often ceases to exist as an independent entity, and its assets and operations are integrated into the acquiring company.

What is Franchising?

Franchising is a business arrangement where a franchisor (the owner of a business model or brand) grants a franchisee the right to use its trademark, business system, and processes to sell goods or services under the franchisor's name. In return, the franchisee typically pays an initial fee and ongoing royalties.

Who is an Entrepreneur?

An entrepreneur is an individual who is motivated, a risk taker, spends lil time on work, action taker, self nuturing, creates a new business, bearing most of the risks and enjoying most of the rewards.

Who is an Intrapreneur?

An intrapreneur is an employee within a larger company who is tasked with developing an innovative idea or project within that company. They often possess entrepreneurial characteristics such as creativity, initiative, and risk-taking, but operate within the resources and structure of an existing organization.

What is an Incubator?

A business incubator is an organization that helps new and startup companies to develop by providing services such as management training, office space, coaching, networking opportunities, and access to funding. The goal is to accelerate the growth and success of new ventures.

What is a Business Plan?

A business plan is a formal written document that outlines a company's goals, methods for achieving those

What are parts of a business plan?

Executive summary, competition, management qualification, marketing plan, finances, manufacturing, capital requirements, target, background info on company.

Who is an Angel Investor?

An angel investor is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. They often bring valuable experience and contacts in addition to funding.

Who are Venture Capitalists?

Venture capitalists are investors who provide capital to startup companies and small businesses with

What is the SBA?

The SBA (Small Business Administration) is a U.S. government agency that provides support to entrepreneurs and small businesses. Its mission is to maintain and strengthen the nation's economy by enabling the establishment and growth of small businesses and by assisting in the economic recovery of communities after disasters.