Chapter 3: Economic Environment of Business

question
economics
answer
The body of knowledge that relates to producing and using goods and services that satify human wants.
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economic wants
answer
The desire for scarce material goods and services.
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noneconomic wants
answer
Desire for non material things that are not scarce.
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utility
answer
The ability of a good or service to satisfy a want.
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producer
answer
anyone who aids in creating a utility
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factors of production
answer
land, labor, capital goods, and management- the four basic resources that are combined to create useful goods and services.
question
natural resources
answer
Anything provided by nature that affects the productive ability of a country.
question
labor
answer
The human effort, either physical or mental, that goes into the production of goods and services.
question
human capital
answer
Accumalated knowledge and skills of
question
capital goods
answer
Buliding tools machines and other equipment that are use to produce other goods but do not directly satisfy human wants
question
capital formation
answer
The production of capital goods
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consumer goods and services
answer
Products produces for sale to individuals and families for personal use
question
economic system
answer
An organized way for a country to decide how to use its productive resources; that is, to decide what, how, and for whom goods and services will be produced.
question
market economy
answer
An economic system in which individual buying decisions in the market place together determine what, how, and for whom goods and services will be produced.
question
command economy
answer
An economic system in which the method for determining what how and for whom goods and serivces are produced is decided by a central planning authority.
question
mixed economy
answer
An economic system that uses aspects of a market and a command economy to make decisions about what, how and for whom goods and services are produced.
question
privatization
answer
Transfer of authority to provide a good or service from a government to individuals or privately owned business.
question
capitalism
answer
An economic-polital system in which private citizens are free to go into business for themselves, to produce, and distribute what they produce as they please.
question
socialism
answer
An economic-political system in which the government controls and regulates the means of production.
question
communism
answer
Forced socialism where all or almost all the productive resoursed of a nation are owned by the government
question
private property
answer
items of value that individuals can own use and sell.
question
profit
answer
The incentive, as well as the reward, for producing goods and services.
question
demand
answer
The # of simialr products that will be bought at a given time at a given price.
question
supply
answer
The # of similar products that will be offered for sale at a particular time at a particular price.
question
competition
answer
Is the rivalry among sellers for consumers' dollars.
question
economic growth
answer
oocurs when a country's ouput exceeds it population growth.
question
consumer price index (CPI)
answer
A measure of the avg. change in prices of consumer goods and sefices typically purchased by people living in urban areas.
question
recession
answer
A decline in the GDP that continues for 6 months or more.
question
inflation
answer
rapid rise in prices caused by inadequate supply.
question
business cycles
answer
A pattern of irregular but repeated expansion and contraction of the GDP
question
depression
answer
A long severe drop in the GDP
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question
economics
answer
The body of knowledge that relates to producing and using goods and services that satify human wants.
question
economic wants
answer
The desire for scarce material goods and services.
question
noneconomic wants
answer
Desire for non material things that are not scarce.
question
utility
answer
The ability of a good or service to satisfy a want.
question
producer
answer
anyone who aids in creating a utility
question
factors of production
answer
land, labor, capital goods, and management- the four basic resources that are combined to create useful goods and services.
question
natural resources
answer
Anything provided by nature that affects the productive ability of a country.
question
labor
answer
The human effort, either physical or mental, that goes into the production of goods and services.
question
human capital
answer
Accumalated knowledge and skills of
question
capital goods
answer
Buliding tools machines and other equipment that are use to produce other goods but do not directly satisfy human wants
question
capital formation
answer
The production of capital goods
question
consumer goods and services
answer
Products produces for sale to individuals and families for personal use
question
economic system
answer
An organized way for a country to decide how to use its productive resources; that is, to decide what, how, and for whom goods and services will be produced.
question
market economy
answer
An economic system in which individual buying decisions in the market place together determine what, how, and for whom goods and services will be produced.
question
command economy
answer
An economic system in which the method for determining what how and for whom goods and serivces are produced is decided by a central planning authority.
question
mixed economy
answer
An economic system that uses aspects of a market and a command economy to make decisions about what, how and for whom goods and services are produced.
question
privatization
answer
Transfer of authority to provide a good or service from a government to individuals or privately owned business.
question
capitalism
answer
An economic-polital system in which private citizens are free to go into business for themselves, to produce, and distribute what they produce as they please.
question
socialism
answer
An economic-political system in which the government controls and regulates the means of production.
question
communism
answer
Forced socialism where all or almost all the productive resoursed of a nation are owned by the government
question
private property
answer
items of value that individuals can own use and sell.
question
profit
answer
The incentive, as well as the reward, for producing goods and services.
question
demand
answer
The # of simialr products that will be bought at a given time at a given price.
question
supply
answer
The # of similar products that will be offered for sale at a particular time at a particular price.
question
competition
answer
Is the rivalry among sellers for consumers' dollars.
question
economic growth
answer
oocurs when a country's ouput exceeds it population growth.
question
consumer price index (CPI)
answer
A measure of the avg. change in prices of consumer goods and sefices typically purchased by people living in urban areas.
question
recession
answer
A decline in the GDP that continues for 6 months or more.
question
inflation
answer
rapid rise in prices caused by inadequate supply.
question
business cycles
answer
A pattern of irregular but repeated expansion and contraction of the GDP
question
depression
answer
A long severe drop in the GDP