Business econ u2

Macroeconomics

The study of systems/structure, behavior, and decision-making of an economy as a whole, focusing on how a society allocates, produces, and consumes resources, goods, and services.

Microeconomics

The study of behavior of individuals and businesses in making decisions regarding allocation of scarce resources and the interactions between them.

Economic Systems

The way a society allocates, produces, and distributes resources, goods, and services.

Economic Systems

The way a society allocates, produces, and distributes resources, goods, and services.

Command Economy

An economic system where decisions are made by select leaders and there is government control over resources and production.

Mixed Economy

An economic system that incorporates elements from various market systems, combining free market principles with government intervention.

Market Economy

An economic system where consumers influence producers' decisions, encouraging individuality and trade.

Traditional Economy

An economic system that is based on traditions and customs prevalent within a society.

Four Factors of Production

Factors needed to produce goods and services.

Land

Natural resources used in the production process.

Capital

Physical and intangible resources including human training, skills, and financial resources (money).

Labor

Physical and mental work involved in the production process.

Entrepreneurship

The willingness and ability to start a new business or enterprise.

Capitalism

A system where private individuals and enterprises own the means of production and profit from them, with private property enforced as an incentive to produce.

Communism

A classless economic system where production and property are communally owned, eliminating the use of money.

Socialism

An economic system focused on production for use rather than profit, promoting the distribution of wealth and resources among all, with free access to goods and services.

Adam Smith

Known as the 'Father of Modern Economics', he was a capitalist who believed that wealth is created through labor and that self-interest drives individuals to use their resources for profit.

Karl Marx

A communist thinker who argued that capitalism would ultimately lead to its own downfall as inequality increases and competition diminishes corporate profits.

Factors Affecting Supply & Demand

Elements that influence the availability and desire for goods and services, including Substitutions, Competition, Taxes, and Regulation.

The Market

Any structure that allows buyers and sellers to exchange goods, services, and information.

Equilibrium

The market clearing price where supply and demand are equal.

Elastic Demand

Demand that is highly responsive to price changes.

Inelastic Demand

Demand for a good or service that remains relatively unchanged when the price moves up or down.

Surplus

A situation where supply exceeds demand.

Shortage

A situation where demand exceeds supply.

Price Floor

The minimum price that a producer can sell a good or service, set by the government.

Price Ceiling

The maximum price that a producer can sell a good or service, set by the government.

Perfect Competition

A market structure characterized by many buyers and sellers, identical products, and no barriers to entry, resulting in no control over the price and supply and demand equilibrium.

Imperfect Competition

A market structure where one or more conditions of perfect competition are not met, leading to varied levels of competition.

Monopolistic Competition

A market structure with many companies that produce similar but differentiated products, allowing for some control over prices.

Duopoly

A market structure dominated by two competitors, which control a significant market share.

Oligopoly

A market structure where pricing control lies with a few sellers, enabling them to manipulate prices through supply adjustments.

Monopoly

A market structure in which a single seller controls the market for a good or service and can set prices to maximize profit.