BUS-X 100 Chapter Notes - Chapter 1-16: Monopolistic Competition, Economic Equilibrium, Mixed Economy
Chapter 1
Business - individuals or organizations who try to earn a profit by providing products that satisfy
people’s eeds
Product - a good or service with tangible and intangible characteristics that provide satisfaction and
benefits
profit - the difference between what it costs to make and sell a product and what a customer pays for it
nonprofit organizations - organizations that may provide goods or services but do not have the
fundamental purpose of earning profits
stakeholders - groups that have a stake in the success and outcomes of a business
economics - the study of how resources are distributed for the production of goods and services within a
social system
natural resources - land, forests, minerals, water, and other things that are not made by people
human resources - the physical and mental abilities that people use to produce goods and services; also
called labor
financial resources - the funds used to acquire the natural and human resources needed to provide
products; also called capital
economic system - a description of how a particular society distributes its resources to produce goods
and services
communism - first described by Karl Marx as a society in which the people, without regard to class, own
all the atio’s resoures
socialism - an economic system in which the government owns and operates basic industries but
individuals own most businesses
capitalism (free enterprise) - an economic system in which individuals own and operate the majority of
businesses that provide goods and services
free-market system - pure capitalism, in which all economic decisions are made without government
intervention
mixed economies - economies made up of elements from more than one economic system
demand - the number of goods and services that consumers are willing to buy at different prices at a
specific time
supply - the number of products— goods and services—that businesses are willing to sell at different
prices at a specific time
equilibrium price - the price at which the number of products that businesses are willing to supply
equals the amount of products that consumers are willing to buy at a specific point in time
competition - the rialr aog usiesses for osuers’ dollars
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pure competition - the market structure that exists when there are many small businesses selling one
standardized product
monopolistic competition - the market structure that exists when there are fewer businesses than in a
pure- competition environment and the differences among the goods they sell are small
oligopoly- the market structure that exists when there are very few businesses selling a product
monopoly - the market structure that exists when there is only one business providing a product in a
given market
economic expansion - the situation that occurs when an economy is growing and people are spending
more money; their purchases stimulate the production of goods and services, which in turn stimulates
employment
inflation - a condition characterized by a continuing rise in prices
economic contraction - a slowdown of the economy characterized by a decline in spending and during
which businesses cut back on production and lay off workers
recession - a decline in production, employment, and income
unemployment - the condition in which a percentage of the population wants to work but is unable to
find jobs
depression - a condition of the economy in which unemployment is very high, consumer spending is low,
and business output is sharply reduced
gross domestic product (GDP) - the sum of all goods and services produced in a country during a year
budget deficit - the condition in which a nation spends more than it takes in from taxes
entrepreneur - an individual who risks his or her wealth, time, and effort to develop for profit an
innovative product or way of doing something
Chapter 3
international business - the buying, selling, and trading of goods and services across national boundaries
absolute advantage - a monopoly that exists when a country is the only source of an item, the only
producer of an item, or the most efficient producer of an item
comparative advantage - the basis of most international trade, when a country specializes in products
that it can supply more efficiently or at a lower cost than it can produce other items
outsourcing - the transferring of manufacturing or other tasks—such as data processing—to countries
where labor and supplies are less expensive
exporting - the sale of goods and services to foreign markets
importing - the purchase of goods and services from foreign sources
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Document Summary
Business - individuals or organizations who try to earn a profit by providing products that satisfy people"s (cid:374)eeds. General agreement on tariffs and trade (gatt) - a trade agreement, originally signed by 23 nations in. 1947, that provided a forum for tariff negotiations and a place where international trade problems could be discussed and resolved. World trade organization (wto) - international organization dealing with the rules of trade between nations. North american free trade agreement (nafta) - agreement that eliminates most tariffs and trade restrictions on agricultural and manufactured products to encourage trade among canada, the united. European union (eu) - a union of european nations established in 1958 to promote trade among its members; one of the largest single markets today. Asia-pacific economic cooperation (apec) - an international trade alliance that promotes open trade and economic and technical cooperation among member nations.
