what is econ
What is Scarcity?
Condition that results from society not having enough resources to produce all the things people would like to have
What does an economic system do for the people?
It provides the wants and needs in an organized way.
What is a corporation?
Business organization recognized by law as a separate legal entity having all the rights of an individual
define demand
The desire, ability, and willingness to buy a product
What is the objective of a business?
To make a profit.
What is Free enterprise economy?
Where consumers and privately owned businesses answer the three basic economic questions
What is the role of a consumer?
The role of a consumer is to determine what gets produced.
Ways to estimate cash flows
Income statement
Net income
Expenses subtracted
Depreciation
four factors of demand
Elasticity
Demand Elasticity
Elastic
Inelastic
What is fixed cost?
Costs that businesses collect even if business is slow
What is cost-benefit analysis?
key concept in world of economics
Why is economic security important
It is important for insurance plans, Social Security, and Medicare.
Ways to reinvest cash flows?
payments (bonuses, dividend payments)
reinvest into company to produce additional product
If cash flows are positive, and above depreciation the firm will grow
Investors look at cash flow
define elastic demand
Change in price causes relatively larger change in demand
How is production affected the most?
Changes in the market.
What is one Factor of Production?
1. Land
2. Capital
3. Labor
4. Entrepreneurs
5. Production
6. Decision-Making
What does economic freedom include?
Economic freedom is the right to choose a career, employer, job location, and ability to move jobs. From a business perspective, businesses are allowed to run their business how they please within the law.
What is one buisness type?
sole proprietorships
partnerships
corporations
define inelastic demand
Change in price causes relatively smaller change in demand
What is supply elasticity?
The way that supply relates to cost
What are opportunity costs?
the loss of potential gain from other alternatives when one alternative is chosen
What are specific examples of states depending on a political system?
China and Venezuela
What is a sole proprietorship?
business owned and run by one person
what effects demand
change in quantity demanded
income
substitution effect
consumer income
consumer tastes (change in demand)
complements (change in demand)
expectations (change in demand)
number of consumers
change in technology
marketing
weather
What is the production function?
a figure that shows how total output changes when the amount of a single variable changes while all the other functions are held constant.