EC-070
This is the primary motive for most businesses to operate in a free enterprise system
What is profit
This is the basic economic problem where unlimited wants meet limited resources
Scarcity
These are tangible items that you can see and touch, like a smartphone or a notebook
Goods
This factor of production includes all "gifts of nature," such as land, minerals, and water.
What are natural resources?
This type of risk involves the possibility of loss, no change, or gain.
What is speculative risk?
This term describes the people or groups who are affected by a business’s actions, such as customers, employees, and the community
What is stakeholders
When you choose one option over another, this is the value of the next best alternative that you give up
opportunity cost
Unlike goods, these are intangible activities performed by others, such as a haircut or a legal consultation.
Services
This resource refers to the physical and mental efforts of people used in production.
What is labor?
This specific type of risk involves threats that can be prevented or reduced through insurance.
What is insurable risk?
Businesses contribute to society by providing these two things, which satisfy the needs and wants of consumers.
What are goods and services
These are the three basic economic questions every society must answer: What to produce, how to produce it, and this.
Who will receive/consume it?
This type of good is used by a business to produce other goods and services, such as a pizza oven in a restaurant.
What is industrial or capital good
This factor includes the machinery, tools, and buildings used to make products.
What is capital?
Economic downturns, inflation, and changes in consumer demand are examples of this category of risk.
What are economic risks?
This social responsibility concept suggests that businesses should act in a way that benefits society at large, not just their owners.
What is Corporate Social Responsibility
This type of study focuses on the choices made by individual people and individual businesses.
Microeconomics
These are goods that are used together, such as printers and ink cartridges.
What are complementary goods?
This fourth factor involves the person who takes the risk to start a business and combine the other three resources.
Who is an entrepreneur?
Risks caused by human errors, employee theft, or customer accidents fall under this category.
What are human risks?
By providing jobs and paying taxes, businesses help maintain and improve this, which measures the level of material comfort in a society
What is the standard of living?
This law states that as more of a specific good is consumed, the additional satisfaction gained from each new unit decreases.
The Law of Diminishing Marginal Utility
Economic goods are scarce, meaning they have a price; items that are so plentiful they have no price are called this.
What are free goods?
When a resource becomes harder to find or more expensive, businesses often use this process to find a different resource to take its place.
What is resource substitution?
A business that installs security cameras and fire sprinklers is using this risk management strategy.
What is risk mitigation?