| A | B |
|---|
| Business | organization that provides goods or services to earn profits |
| Profits | difference between a business’s revenues and its expenses |
| External Environment | everything outside an organization’s boundaries that might affect it |
| Economic System | a nation’s system for allocating its resources among its citizens, both individuals and organizations |
| Factors of Production | the resources that a country’s businesses use to produce goods and services |
| Labor | Includes the physical and intellectual contributions people make while engaged in economic production. Also called human resources. |
| Capital | The financial resources needed to operate the business |
| Entrepreneurship | People who accept the risks and opportunities entailed in creating and operating a new business venture |
| Physical Resources | Tangible things that organizations use to conduct their business and include natural resources and raw materials, offices, storage and production facilities, parts and supplies, etc. |
| Information Resources | Data and other information used by businesses and include market forecasts, specialized knowledge of people and economic data |
| Planned Economy | economy that relies on a centralized government to control all or most factors of production and to make all or most production and allocation decisions |
| Market Economy | individual producers and consumers control production and allocation by creating combinations of supply and demand |
| Mixed Market Economies | features characteristics of both planned and market economies |
| Privatization | process of converting government enterprises into privately owned companies |
| Private enterprise system | one that allows individuals to pursue their own interests with minimal government restriction |
| Private property rights | ownership of the resources used to create wealth is in the hands of individuals |
| Freedom of choice | you can sell your labor to any employer you choose |
| Competition | occurs when two or more businesses vie for the same resources or customers |
| Monopolistic Competition | market or industry characterized by numerous buyers and relatively numerous sellers trying to differentiate their products from those of competitors |
| Oligopoly | market or industry characterized by a handful of (generally large) sellers with the power to influence the prices of their products |
| Monopoly | market or industry in which there is only one producer that can therefore set the prices of its products |
| Natural Monopoly | industry in which one company can most efficiently supply all needed goods or services |
| perfect competition | all firms in an industry must be small, and |
