Business
An organization that seeks to earn profits by providing goods and services.
Profits
What remains (if anything) after a business’ expenses are subtracted from its sales revenue.
Factors of Production (FOP)
Resources used to produce goods and services: labor capital, entrepreneurs, and natural resources.
Capital
Funds required to starts a business and to keep it operating/growing.
Command Economy
An economic system in which government controls all or most FOP and makes all or most production decisions.
Market Economy
An economic system in which individuals control all or most FOP and make all or most production decisions.
Communism
Type of command economy in which the government owns and operates all industries.
How many command economies are there? What are they?
Two. Socialism and communism.
Input Market
Firms buy resources that they need in the production of goods and services.
Output Market
Firms supply goods and services in response to demand on the part of consumers.
Capitalism:
Economics system in which markets decide what, when, and for whom to produce.
Mixed Market Economy
An Economic system with elements of a both command economy and a market economy, which in practice is typical for most nations’ economies.
Competition Act
Prohibits a variety of business practices that lessen competition.
Lobbyist
A person hired by a company or an industry to represent its interests with government officials.
Trade Association
An organization dedicated to promoting the interests and assisting the member of a particular industry.
Market
An economic system in which individuals control all or most FOP and make all or most production decisions.
Demand
Willingness and ability of buyers to purchase a product or service.
Supply
Willingness and ability of producers to offer a good or service.
Law of Demand
The principle that buyers will purchase (demand) more of a product as price drops.
Law of Supply
The principle that producers will offer (supply) more of a product as price rises.
Demand and Supply Schedule
Assessment of the relationship between levels of demand and supply at different price levels.
Demand Curve
Graph showing how many units of a product will be demanded (bought) at different prices.
Supply Curve
Graph showing how many units of a product will be supplied (offered for sale) at different prices.
Market Price
Profit-maximizing price at which the quantity of good supplied are equal.
