Microeconomics
Definition of opportunity cost
What is the goods you give up in order to get another good
The Accounting Equation
A = L + OE
Meaning of CPI (Consumer Price Index)
An economic indicator measuring changes in average price paid by consumers for a basket of goods/services over time
Definition of target market
The market or group of consumers you believe will buy your product and therefore market towards
The Porters 5 Forces
Competitive rivalry, buyer power, supplier power, threat of entry, threat of substitutes
Total cost formula for Cost of Production
Three sections of the Statement of Cash Flows
Operating, Investing, Financing
GDP Deflator Equation
(Nominal GDP / Real GDP) X100
5 P's of Marketing
Price, place, product, people, promotion
Definition of threat of entrants
New firms that could begin selling in your product/service market (driving away business)
Definition of elasticity
Current Ratio Equation
Current Assets / Current Liabilities
Unemployment rate equation
(# of unemployed / # in Labor Force) x100
Primary vs secondary data
Primary is data gathered directly from consumers (focus groups)
Secondary data is gathered from studies that have already received data from consumers
Definition of law of diminishing returns
As you add more and more inputs, your level of efficiency and therefore outputs will decrease
Purpose of the equation on the board
Utility-maximization equation
Debt to Equity Ratio
Total Debt / Total Shareholder's Equity
Definition of nominal and real GDP
Nominal = Values of goods with current prices
Real = Values of goods with base year pricing
Definition of demographics
Characteristics of human populations and segments when used to identify consumer markets
Provide an example of two direct competitors
Draw an increasing opportunity cost curve
(To provide answer)
Effect on profit if inventory account is overstated
COGS will be too high and therefore profits will be overstated
Effect of higher interest rate on investments
Higher interest rates, lower investments
Degree of centralization
Determines where main decisions are made in an organization (centralized means management makes all decisions)
The four types of market structures
Monopoly, oligopoly, monopolistic competition, perfect competition