Business and Economics Principles

Comprehensive vocabulary flashcards covering basic business concepts, environments, macroeconomic metrics, degrees of competition, and economic systems based on lecture notes.

Business

any activity that seeks to provide goods and services to others while operating at a profit

Business Environment

consists of the surrounding factors that either help or hinder the development of businesses

Goods

any tangible products such as computers, food, clothing, cars, and appliances

Services

intangible products such as education, health care, insurance, recreation, and travel and tourism

Revenue

The total amount of money a business takes in during a given period by selling goods and services.

Profit

The amount of money a business earns above and beyond what it spends for salaries and other expenses needed to run the operation

Loss

Occurs when a business's expenses are more than its revenues.

Entrepreneur

A person who starts up and takes on the risk of a business

Risk

a chance the entrepreneur of losing time and money on a business that may not prove profitable

Standard of Living

refers to the amount of goods and services people can buy with the money they have

Stakeholders

All the people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address.

Nonprofit organization

an organization whose goals do not include making a personal profit for its owners or organizers

The Economic and Legal Environment

1. Freedom of ownership 2. Contract laws 3. Elimination of corruption 4. Tradable currency 5. Minimum taxes and regulation

The Technological Environment

1. information technology 2. databases 3. bar codes 4. the internet

The Competitive Environment

1. Customer service 2. Stakeholder recognition 3. Employee service 4. Concern for the environment

The Social Environment

1. Diversity 2. Demographic changes 3. Family changes

Tenchonlogy

Means everything from phones, mobile devices, medical imaging machines, robots, the Internet, etc.

Effectivness

producing the desired result

Efficiency

producing goods and services using the least amount of resources

Productivity

the amount of output you generate given the amount of input

Adapting of Change

discusses how one form of technology, drones, can make business more effective, efficient, and productive

Gross Domestic Product

The total value of goods and services produced within the borders of a country during a specific time period, usually one year.

Unemployment Rate

the percentage of civilians at least 16 years old who are unemployed and tried to find a job within the prior four weeks

Inflation

general rise in prices of goods and services over time

Disinflation

When the price increases are slowing (inflation rate declining).

Deflation

Prices are declining

Stagflation

A situation when the economy is slowing but prices are going up anyhow.

Consumer Price Index

monthly statistics that measure the pace of inflation or deflation

Core Inflation

CPI minus food and energy costs

Product Price Index (PPI)

An index that measures prices at the wholesale level.

Business Cycles

the periodic rises and falls that occur in economies over time

Recession

two or more consecutive quarters of decline in the GDP

Depression

a severe recession, usually accompanied by deflation

Free Market Price Determination

In a free market, price is determined by buyers and sellers negotiating in the marketplace.

Supply

refers to the quantities of products manufacturers or owners are willing to sell at different prices at a specific time

Demand

the quality of products that people are willing to buy at different prices at a specific time

Market Price

the price determined by supply and demand, toward which the market will trend

4 Degrees of Competition

1. perfect competition 2. monopolistic competition 3. oligopoly 4. monopoly

Equilibrium Point

the place where quantity demanded and quantity supplied meet

Perfect Competition

exists when there are many sellers in a market and none is large enough to dictate the price of a product

Monopolistic Competition

a large number of sellers produce very similar products that buyers nevertheless perceive as different

Oligopoly

A degree of competition in which just a few sellers dominate the market

Monopoly

occurs when one seller controls the total supply of a product or service, and sets the price

Demography

the statistical study of the human population with the regard to its size, density, and other characteristics such as age, race, gender, and income

Economics

the study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals

Macroeconomics

looks at the operation of a nations economy as a whole

Microeconomics

looks at the behavior and organizations in markets for particular products or services

GDP

Gross Domestic Product

Resource Development

the study of how to increase resources and to create the conditions that will make better use of those resources

Factors of Production

land, labor, capital, entrepreneurship, knowledge

2 Types of Economic Systems

command economics and free-market economies

Command Economies

exist when the government largely decides what goods and services will be produced, who gets them, and how the economy will grow (socialism and communism are variations on this system)

Free-Market Economies

exist when the market largely determines what goods and services get produced, who gets them, and how the economy grows (capitalism is the proper term)

Socialism

an economic system based on the premise that some, if not most, basic businesses should be owned by the government so that profits can be more evenly distributed among the people

Brain Drain

the loss of highly educated and skilled workers to other countries

Communism

an economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production

Capitalism

all or most of the factors of production and distribution are owned by individuals

Invisible Hand

used to describe the process that turns self-directed gain into social and economic benefits for all

Capitalism Basic Rights

1. the right to own private property 2. the right to own a business and keep all that business's profits 3. the right to freedom competition 4. the right to freedom of choice

Mixed Economies

Where some allocation of resources is made by the market and some by the government.

Price

tells producers how much to produce