COMMERCE 1E03 - Chapter 2

How Economic Issues Affect Business

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Cards In This Set

Front Back
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
Economics
The part of economic study that looks at the operation of a nation's economy as a whole
Macroeconomics
The part of economic study that looks at the behavior of people and organizations in particular markets
Microeconomics
The study of how to increase resources and the creation of the conditions that will make better use of those resources (eg. recycling)
Resource Development
A phrase coined by Adam Smith to describe the process that turns self-directed gain into social and economic benefits for all
Invisible Hand
An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit
Capitalism
The quantity of products that manufacturers or owners are willing to sell at different prices at a specific time
Supply
The quantity of products that people are willing to buy at different prices at a specific time
Demand
The price determined by supply and demand
Market Price
The market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product
Perfect Competition
The market situation in which a large number of sellers product products that are very similar but that are perceived by buyers as different
Monopolistic Competition
A form of competition in which just a few sellers dominate the market
Oligopoly
A market in which there is only one seller for a product or service
Monopoly
An economic systm based on the premise that some, if not most, basic businesses should be owned by the government so that profits can be evely distributed among the people
Socialism
An economic and political system in which the state (the government) makes all economic decisions and owns almost all of the major factors of production
Communism