Chapters 1, 3, 4 Vocabulary

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Management (MGT)
Chris Bovaird

MANAGEMENT VOCABS CHAPTER 1 Business: An organization that seeks to earn profits by providing goods and services. Profit : The money that remains after a business’s expenses are subtracted from its revenues Expenses: The money a business spends producing its good and services and generally running the business. Also referred as “costs.” Revenues: The money a business earns selling its products and services. Also referred to as “sales.” Economic system: The way in which a nation allocates its resources among its citizens. Factors of Production: The resources used to produce goods and services: labour, capital, entrepreneurs and natural resources Labour: The mental and physical training and talents of people (aka human resource). Capital: The funds needed to operate an enterprise. Entrepreneurs: An individual who organizes and manages labour, capital and natural resources to produce goods and services to earn a profit, but who also runs the risk of failure. Natural Resources: Items used in the production of goods and services in their natural state, including land, water, mineral deposits and trees. Information Resources: Information such as market forecasts, economic data, and specialized knowledge of employees that is useful to a business and that helps it achieve its goals. Command Economies: An economic system in which government controls all or most factors of production and makes all or most production decisions. Market Economies: An economic system in which Individuals control all or most factors of production and make all or most decisions. Communism: A type of command economy in which the government owns and operates ALL industries. Socialism: Gov’t owns and operates the main industries; individuals own and operate less crucial industries. Market : A mechanism for exchange between the buyers and sellers of a particular good or service. Capitalism: A kind of market economy offering private ownership of the factors of production and of profits from business activity. Mixed Market Economy: An economic system with elements of both a command economy and a market economy. Individuals own MAORITY of the factors of production and most decisions. Privatization: The transfer of activities from the government to the public sector. Deregulation: A reduction in the number of laws affecting business activity. Revenue taxes: taxes whose main purpose is to fund govn’t services and programs Progressive Revenue Tax: Taxes levied at a higher rate on higher-income taxpayer and at a lower rate on lower- income taxpayers Regressive Revenue Taxes: Taxes that cause poorer people to pay a higher percentage of income than richer people pay. Restrictive taxes: Taxes levied to control certain activities that legislators believe should be controlled. Demand: The willingness and ability of buyers to purchase a product or service. Supply: The willingness and ability of producers/ sellers to offer a good or service for sale. The Law of Demand: Buyers will demand more of a product when $ is low, and less when $ is high The Law of Supply: Producers will supply more of a product for sale when the $ is high and less when $ is low Demand and Supply Schedule: Assessment of the relationships between different levels of demand and supply at different $ levels Demand curve: Graph showing how many units of a product will be demanded at different $ Supply curve: Graph showing how many units of a product will be supplied at different $ Market/ Equilibrium Price: Profit- maximizing price at which the quantity of goods demanded and the quantity of goods supplied are equal Surplus: Situation in which quantity supplied exceeds quantity demanded Shortage: Situation in which quantity demanded exceeds quantity supplied Private enterprise: An economic system characterized by private property rights, freedom of choice, profits and competition Competition: The vying among businesses in a particular market or industry to best satisfy consumer demands and earn profits. Perfect Competition: A market or industry characterized by a very large number of small firms producing an identical product so that none of the firms has any ability to influence price. Monopolistic Competition: A market or industry characterized by a large number of firms supplying products that are similar but distinctive enough from one another to give firms some ability to influence price. Oligopoly: A market or industry characterized by a small number of very large firms that have the power to influence the price of their product and/ or resources. Monopoly: A market or industry with only one producer, who can set the price of its product and or resources. Natural Monopoly: A market or industry in which having only one producer is most efficient because it can meet the entire
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