| A | B |
|---|
| free enterprise system | encourages individuals to start and operate own businesses w/o govt involvement |
| USA | modified free enterprise system, some govt involvement |
| licensing agreement | gives a company permission to use another's name, symbol (logo), or product, a fee is paid to use |
| competition | the struggle between companies for customers |
| price competition | focuses on sale price of product, when all things equal, customer will buy from store with lowest priced product |
| nonprice competition | where businesses compete for customers on factors not realted to price, inclu. quality, sercie, location, reputation, Nordstrom vs. WalMart |
| monopoly | a company's exclusive control over a product or the means of producing it |
| risk | the potential loss or failure in relation to the potential for gain (profit) |
| profit | money earned from conducting business after all costs and expenses have been paid |
| govt-supplier of services | provides military, police, fire protection and free public education |
| govt-supporter of business | Small Business Administration helps people start business, contracts with American companies to buy military uniforms and equipment |
| govt-regulator | creates laws to protect safety, health, and welfare of individuals and businesses |
| OSHA | occupational safety and health administration, protects workers in workplace |
| EPA | environmental protection agency, protects environment |
| SEC | securities and exchange commission, regulates sale of stocks and bonds, prevents ENRON! |
| predatory pricing | undercharging for a product to put competition out of business |
| false advertising | deceptive and misleading ads on tv and print |
| federal reserve board | monitors our economy and controls money supply of banking system, controls interest rates, Bernanke |
| govt-competitor | controls 3 businesses, Tennessee Valley Authority, US Postal Service, and Amtrak |
| consumer's role | to pick winning products and determine demand for any given product |
| supply | amount of goods producers are willing to make and sell, upward line on supply and demand curve, pg 53 |
| demand | refers to consumer willingness and ability to buy products, as price increases, demand falls, downward line on graph, pg 53 |
| surplus | when supply of goods exceeds (is more than) demand |
| shortage | when demand exceeds supply, businesses raise price people still buy! |
| equilibrium | when amount of product supplied is equal to amount demanded |
