Vocabulary
What you give up to get something else
What is Opportunity Cost?
How much producers are willing and able to produce at a certain price.
What is supply?
Banks, Savings and Loans, and Credit Unions are examples of this type of institution?
What is a depository institution?
The money needed to start your business is called this.
What is start up capital? (I would also accept start up costs)
The balance of trade for a country that has $5 Billion in exports and $4.5 Billion in imports.
What is a $500 Million trade surplus?
This requires that people decide which goods and services to use or not use due to limited resources and unlimited wants.
What is scarcity?
The degree to which demand is affected by price.
What is demand elasticity?
This encourages specific behavior and helps motivate individuals to take specific action.
What is an incentive?
This is created when the government (or person) spends more than it takes in.
What is a budget deficit?
Tariffs, quotas, and embargoes are examples of this.
What is protectionism?
A situation in which the owner of a business is responsible to pay all the business debts out of personal assets. It is one of the downsides to a sole proprietorship.
What is unlimited liability?
Limited Liability, unlimited life, and ability to raise money are advantages of this type of business entity.
What is a corporation?
GAAP stands for this.
What is Generally Accepted Accounting Principles?
The value of all final goods and services produced inside a country in a given period of time.
What is the Gross Domestic Product (GDP)?
The amount of money needed to operate a business for the first few months or years.
What is operating capital?
A situation in which a business's life span or existence is determined by the owner's life span or decision to terminate the business.
What is limited life?
These are the rules by which a corporation will operate?
What are corporate bylaws?
Negative cash flow is also known as this.
What is a cash crunch?
This measures the cost of a basket of goods and services for an urban family. It is used to measure inflation.
What is the Consumer Price Index (CPI)?
Sales minus the costs of goods sold. Or the profit made from selling merchandise before operating expenses are deducted.
What is gross profit on sales?
How a nation makes decisions to allocate its resources
What is economy?
The three main parts of a business plan include the marketing plan, the financial plan and this.
What is the strategic plan?
A period of economic downturn for a period of 6 months or less. It is also the down slope in a business cycle.
What is recession?
The three main types of financial statements
What are Income Statements, Cash Flow Statements, and Balance Sheets?
Expenses that remain the same regardless of how many items were manufactured or sold.
What are fixed expenses?