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Factors of Production
The resources used to create wealth: land, labor, capital. entrepreneurship, and knowledge.
5 Elements in Business Environment
- The economic and legal environment
- The technological environment
- The competitive environment
- The social environment
- The global business environment
The Foundations of Capitalism
- The right to own private property
- The right to own a business and keep all that business's profit
- The right to freedom of competition
- The right to freedom of choice
Four Different Degrees of Competition
- Perfect Competition
- Monopolistic Competition
The degree of competition in which there are many sellers in a market and none is large enough to dictate the price of a product.
The degree of competition in which a large number of sellers produce very similar products that buyers nevertheless perceive as different.
A degree of competition in which just a few sellers dominate the market.
A degree of competition in which only one seller controls the total supply of a product or service, and sets the price.
Four Kinds of Unemployment
- Frictional unemployment
- Structural unemployment
- Cyclical unemployment
- Seasonal unemployment
People have to quit work because they didn't like the job, the boss, or the working conditions and who haven't yet found a new job. It also refers to those people who are entering the labor force for the first time (e.g., new graduates) or are returning to the labor force after significant time away (e.g., parents who reared children). There will always be some frictional unemployment because it takes some time to find a first job or a new job.
Unemployment caused by the restructuring of firms or by a mismatch between the skills (or location) of job seekers and the requirements (or location) of available jobs (e.g., coal miners in an area where mines have been closed).
A recession or similar downturn in the business cycle (the ups and downs of business growth and decline over time). This type of unemployment is the most serious.
Where demand for labor varies over the year, as with the harvesting of crops.
Movie 30 min. Solution 1 and 2. On youtube.
The periodic rises and falls that occur in economies over time.
Key Economic Indicators
- The gross domestic product (GDP)
- The unemployment rate
- Price indexes
Gross Domestic Product (GDP)
The total value of final goods and services produced in a country in a given year.
The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals.
An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit.
An economic system based on the premise that some, if not most, basic businesses should be owned by the government so that profits can be more evenly distributed among the people.
Two or more consecutive quarters of decline in the GDP.