| A | B |
|---|
| management | mental human energy used in production, primarily concerned with decision making and evaluation of risks to accomplish predetermined goals |
| land | natural wealth including soil, minerals, native vegetation and wild animals |
| labor | physical human energy used in production |
| capital | man-made wealth used for production, such as machinery, buildings and money |
| corporation | legal business entity made up of stockholders |
| discount rate | rate of interest charged to member banks in the Federal Reserve System |
| federal securities | certificates issued by the Federal Government in return for money loaned to it by individuals, to be repaid with interest |
| fiscal | having to do with money |
| GNP | Gross National Product or total value of all goods and services purchased by the final customers of those products |
| Enterprise | a specific economic project or activity such as raising wheat or dairy cows |
| Diversification | branching out into several different types of enterprises |
| Specialization | concentrating on one particular enterprise |
| Monopoly | a marketing situation in which a large company controls a certain market because it is the only one to provide that service or product |
| Oligopoly | A marketing situation in which a few large companies exert control over a certain market |
| Economics | the science of using scarce resources in the best way possible to satisfy human needs and wants |
| Economic system | the way in which a nation uses its resources to satisfy its people's needs and wants |
| Four basic questions for every economic system | what to produce, how to produce, who produces what, for whom is it produced for |
| 4 economic systems | traditional, command, market, mixed |
| Ownership of resources is by private individuals or corporations | capitalism |
| property owners hold the primary economic power | capitalism |
| Decisions of property owners are usually directed toward obtaining the greatest amount of satisfaction and profit with the least effort | capitalism |
| competition provides the balance between supply and demand and insures the efficient utilization of resources | capitalism |
| No individual can affect the price of a product | pure competition |
| serves as a convenient medium of exchange | money |
| provides a measure of value | money |
| serves to store value for savings | money |
| Raise/lower the "discount rate" or the interest charged to member banks for the money they borrow | Method of the Federal Reserve System to affect the money supply |
| Buy/sell government securities | Method of the Federal Reserve System to affect the money supply |
| When supply is high what happens to demand? | it lowers |
| When supply is high what happens to the price? | it lowers |
| When supply is low what happens to demand? | it raises |
| When supply is low what happens to price? | it will increase |
| When a price for a crop is high, what does a farmer do? | increases production |
| If farmers increase production of a crop, what happens to the price? | Price decreases |
| Supplementary enterprise | additional enterprises that use resources such as land, equipment and labor that would otherwise remain idle part of the time |
| Complementary enterprise | additional enterprises that improve the profitability of the original enterprise |
| competitive enterprise | additional enterprises that detract from the original one by using resources needed by the original enterprise |
| independent enterprise | enterprises that neither detract from no help one another |
| it can provide an alternate source of income should one particular enterprise fail | advantage of diversification |
| may provide a more continuous use of resources | advantage of diversification |
| a manager can concentrate on one enterprise and can become more knowledgeable and efficient in its production | advantage of specialization |
| may reduce overhead costs | advantage of specialization |
| the point on the supply and demand meet on a graph, determines price | equalibrium |
| Someone who buys and sells a commodity hoping to make a profit, although they never physically touch the commodity | speculator |
| The steps involved in getting a product to the consumer (farmer-processor-wholesaler-retailer-consumer) | supply chain |
| Things that happen in production that increase or decrease a farmers ability to make a profit | risk |
| decrease in supply equals | high prices |
| increase in supply equals | lower prices |
| increase in demand equals | high prices |
| decrease in demand equals | lower prices |
| change in the price of THE good | does not change the demand or supply, just the quantity demanded (spur of the moment buying) |
