Economics and entrepreneurship Unit 3

Supply

The willingness of producers to offer good or service for sale

Supply curve

Shows a quantity supplied at different prices

On a graph, the supply curve go up or down

The line will always go up

What is the law of supply?

If the price goes up, quantity and supply will go up. If price goes down, quantity and supply goes down.

What is demand?

The willingness of buyers to purchase a product

What is competition?

Businesses fight over resources and customers

What is the definition of competition?

Two or more businesses that rivalfor the same resources or customers

What are two main benefits from competition?

Benefits to customer, higher product quality, and lower prices

What does perfect competition mean?

Market with a law of small firms that sell the same identical product

What is a business?

An organization that provides goods and/or services to earn profit

What is the main goal for business?

Profit

How is profit measured?

Revenue-expenses= profit or loss

What is an economic system?

A nations procedures for allocating (distributing) resources among citizens

Why would business care about economic system? It operates in

By knowing what to sell more of

What does GDP mean?

Gross domestic product

What does inflation mean?

Prices increase across the board (everything goes up)

What does gross domestic product mean?

The total values of all goods and services produced within a country in a one year

What is the average GDP rate?

2%-3%

What is the ideal average of inflation?

2%

What is unemployment mean?

A situation of joblessness among those who are actively seeking work

What is the ideal average in inflation?

4%-5%

what does low prices mean in inflation?

Bad economic

What does high prices mean in inflation?

Good economic

How many economic systems is there?

3

Demand

The willingness and ability for buyers to purchase a product

demand curve

Shows a quantity demand at different prices and always goes down

Law of demand

The errors will go different directions

Example of law of demand

Price increase, and demand decreases

Price decreases, quality and demand increase

Supply and demand schedule

Relationships between level of supply and demand a various prices And helps managers to understand relationships better

Equilibrium

Demand equals supply

Surplus

What happens to the price having more goods than customers are buying,

Shortage

What happens to the price when having more customers than good demand

Monopolistic

Differentiation is key (make something different)

Oligopoly

Market with a handful of sellers (not a lot)/ more control

Monopoly

Only one producer, They control the price (make it as high as they want)

Does government regulate Monopoly’s?

Yes

what is a small business

Independently owned and operated business, Does not dominate the area, Operators must be their own bosses

Define an Entrepreneur

they can assume risks and responsibility , and can create and operated a new business, and goals is growth and expansion

small business

Independently owned and operated business (NOT by one person, but with no sponsors and no help from other stores), and CANNOT dominate the market area, and operators must be at their own buiness