Economic
Concepts
Concepts
The physical assets used to produce goods and services, including machinery, equipment, buildings, and tools.
What are capital goods?
Assumes that people will generally make choices based on their own personal preferences and desired outcomes.
What is rational choice theory?
The rivalry between companies selling similar products and services, competing to attract customers with limited dollars to spend.
What is competition?
The process of systematically scanning for technological, political, regulatory, social, and demographic changes to discover opportunities to produce new goods and services.
What is the entrepreneurial discovery?
According to the United States Small Business Administration, generally companies with fewer than 500 employees are considered “small” businesses.
What is a small business?
Also called a Command Economic System, is one that is run by a dominant centralized authority that allocates the resources, decides who makes the goods and services and how and where they are distributed, and sets the prices.
What is a centrally planned economic system?
The current prevailing price that a product can be purchased in the marketplace.
What is a market price?
The monetary gain obtained when revenue exceeds all the expenses associated with achieving that revenue, over a certain time period.
What is profit?
A roadmap of the business’s goals and objectives, and the strategy and details of how those goals and objectives will be achieved.
What is a business plan?
The introduction of something new; a new idea, product, method, device, or service.
What is innovation?
Also called the Free Market System, also called Private Enterprise, it is an economic system where production, wages, and prices are determined via the application of the law of supply and demand, with little or no government regulation.
What is a market economic system?
Refers to the change in demand or service of a product as a result of a change in the relative price.
What is substitution effect?
A market where one company controls the supply of a good or service, where other options for consumers aren't readily available, and where the barriers to entry for other companies are highly restrictive.
What is a monopoly?
Gathering together the necessary elements needed to start a business, also called the 3rd stage of the entrepreneurial process.
What is resourcing?
This risk that financial stakeholders will lose money.
What is financial risk?
The reality that people's wants always exceed the resources available to fulfill those wants.
What is scarcity?
This strategy intends to grow sales and gain market share.
What is sales-oriented pricing strategy?
Any property owned by a private party, versus being owned by the public, i.e. the government.
What is private property?
The 5th stage of the entrepreneurial process, where you evaluate if the company is a success or failure, and/or if it needs more time to prove itself.
What is harvesting?
An aspirational view of the future, that if the company is successful in accomplishing its mission, the company and/or world might look a certain way.
What is vision?
Relies on cultural customs, history, ancestral traditions, and time-honored beliefs to make decisions about production and distribution.
What is a traditional economic system?
The degree to which the demand for a product changes based on changes in the price of the product.
What is price elasticity?
The incentive in a private enterprise system for people to risk capital to start a business in order to earn a profit in return.
What is profit motive?
Someone who identifies an opportunity by creating a solution to a problem, starts a business, assumes the personal and financial risk (and rewards) of the venture, and strives for constant improvement in an effort to grow the business and improve society.
What is an entrepreneur?
A feeling of suitability for a particular career or occupation.
What is vocation?