Ch 1 Business Notes

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* What are profits? diff. b/w rev.& expenses
* Factors of Production The resources that a country’s businesses use to produce goods are called

* A planned economy relies on a centralized government to Control all or most factors of production

* Communism and Socialism—2 most basic forms of planned economies are * Capitalism—economic system provides for the private ownership of the factors of production and also encourages entrepreneurship by offering profits as an incentive? * Mixed Market— economy has characteristics of both planned and market economies. * Socialism—economic system do we see the government owning and operating selected major industries? * Define

* demand—The willingness and ability of buyers to purchase a product, good, or service * privatization—The process of converting government enterprises into privately owned companies

* Supply—The term refers to the willingness and ability of producers to offer a good or service for sale. * “Buyers will purchase (demand) more of a product as its price drops and less of a product as its price increases.” This is referred to as The Law of Demand * The concept that producers will offer more of a product for sale as its price increases and less as its price decreases is known as The Law of Supply

* When plotted on the same graph, the supply curve and the demand curve will normally Cross one another at some point * On a graph showing the supply curve and the demand curve, the point at which the supply curve crosses the demand curve is referred to as the Equilibrium Price * A Surplus occurs when the quantity supplied exceeds the quantity demanded. * List the four required elements for a private enterprise system 1. Freedom of Choice

2. Competition
3. Private Property
4. Profits

* Exists when an industry or market has only one producer Monopoly

* Outline the history of U.S. business starting...
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