EC-907
Organized way to handle economic choices.
What is an economic system?
People, not government, own resources.
What is a private enterprise system?
Reward for taking business risks.
What is profit?
This is a normal part of business.
What is risk?
Competition is the rivalry between two or more businesses to attract scarce customer dollars. Businesses compete either directly or indirectly. They generally use price or nonprice competition.
What is direct competition?
No country has enough of these.
What are resources?
A key goal that drives businesses.
What is the profit motive?
Money left after all expenses.
What is net profit?
Risk type involving natural disasters or accidents.
What is hazard risk?
Competing through quality or service.
What is nonprice competition?
System where customs guide decisions.
What is a traditional economy?
This directs buying and selling in the market.
What is the price-directed system?
Profit before subtracting expenses.
What is gross profit?
This kind of risk is not insurable.
What is speculative risk?
Rivalry for limited customer money.
What is competition?
The two forms of a command economy.
What are communism and socialism?
One downside: not everyone earns the same.
What is unequal distribution of wealth?
Profit helps meet this consumer need.
What are goods and services?
Risk from daily business functions.
What is operational risk?
Different products, same customers.
What is indirect competition?
People rely on each other because of this.
What is interdependence?
Two major disadvantages besides inequality.
What are unemployment and poverty?
Without this, businesses can't survive.
What is profit?
These are the four main risk categories.
What are hazard, operational, strategic, and financial?
Two main ways businesses compete.
What are price and nonprice competition?