EC-907
Resources, Markets, Participants, Medium of exchange
What are the elements of all economic systems?
What? How? For Whom?
What are the 3 basic questions economic systems must answer?
Income MINUS expense
What is profit?
The possibility of loss (failure) or gain (success)
What is business risk?
The rivalry between two or more businesses to attract scarce, or limited, customer dollars
What is competition?
Traditional, Command, and Market
What are the types of economic systems?
questions answered by individuals and businesses, not government
What is private enterprise?
Income from sales MINUS cost of goods
What is gross profit?
Hazard, Operational, Strategic, and Financial
What are the classifications of risk?
Occurs between or among businesses that offer similar types of goods or services
What is direct competition?
Villages in the Andes Mountains and Amazon Rainforest communities
What are examples of traditional economies?
Freedom in the marketplace, Competition, the Profit Motive, Limited government control
What are the characteristics of a Private Enterprise?
Money left after cost of goods and operating expenses are subtracted from income
What is net profit?
have two possibilities—loss or no loss.
What is pure risk?
Occurs between or among businesses that offer dissimilar goods or services
What is indirect competition?
Communism and Socialism
What are the primary types of command economic systems?
Unemployment, poverty, and unequal distribution of wealth
What are the disadvantages of a Private Enterprise?
For consumers’ needs and wants, Better wages, Employment opportunities, A stronger economy
What are profits' general benefits?
have the possibility of loss, no change, or gain.
What are speculative risks?
Competing on a basis other than price to attract scarce customer dollars
What is nonprice competition?
Soviet Union, China, and North Korea
What are examples of Communism?
Freedom to choose, Freedom to own, use, buy, and sell private property, Freedom to compete
What are the economic freedoms in a Private Enterprise?
The economy, demand, and chance
What are external factors affecting profit?
Avoiding, preventing, controlling, transferring, retaining
What are ways to handle risk?
Creates a higher standard of living, Creates products that help people be healthier and live longer, Creates new businesses that make more jobs available
What are the benefits of competition on society?