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43 Cards in this Set

  • Front
  • Back

Cost of goods

The amount of money a business pays for the products it sells or for the raw materials from which it produces goods to sell; the amount of money a business pays for the products (or for any part of the products) it sells

Creditors

Individuals or businesses to whom a business owes money or from whom it wants to borrow money

Demand

The quantity of a good or service that buyers are ready to buy at a given price at a particular time

Economy

The system in which people make and spend their incomes

Efficiency

Accomplishing a task with a minimum expenditure of time and effort

Expenses

The money that a business spends

Gross profit

Money left after the cost-of-goods expense is subtracted from total income

Income

The money received by resource owners and by producers for supplying goods and services to consumers

Net profit

Money left after the cost-of-goods expense and the operating expense are each subtracted from the total income

Operating expenses

All of the expenses involved in running a business

Pricing

A marketing function that involves determining and adjusting prices to maximize return and meet customers’ perceptions of value

Private enterprise system

An economic system in which individuals and groups, rather than the government, own or control the means of production—the human and natural resources and capital goods used to produce goods and services

Profit

Monetary reward a business owner receives for taking the risk involved in investing in a business

Profit motive

The desire to make a profit, which moves people to invest in business

Resources

Items that are used to accomplish another activity, such as producing/providing goods and services

Risk

The possibility of loss or failure

Suppliers

Vendors; businesses from which other businesses buy goods or services

Taxes

Monies that individuals or businesses must pay to the government

Celler-Kefauver Antimerger Act

A federal regulation intended to protect competitors from takeovers that would limit competition

Clayton Act

A federal regulation intended to prevent specific business actions that might prohibit competition (e.g., tying agreements and exclusive agreements)

Competition

The rivalry among two or more businesses to attract scarce customer dollars

Direct competition

Rivalry between or among businesses that offer similar types of goods or services

Efficient

Using minimum amounts of resources to the best advantage

Exclusive agreement

An illegal agreement that forbids customers from buying goods and services from competitors

Federal Trade Commission Act

A federal regulation that established a regulatory agency, the Federal Trade Commission (FTC), to monitor business activities in order to prevent unfair competition

Indirect competition

Rivalry between or among businesses that offer dissimilar goods or services

Market structure

The type of market, or environment, in which businesses operate

Monopolistic competition

A type of market structure in which a lot of businesses sell similar products that have only a few differences

Monopoly

A type of market structure in which a market is controlled by one supplier, and there are no substitute goods or services readily available

Nonprice competition

A type of rivalry between or among businesses that involves factors other than price (e.g., customer services, modern facilities, trained personnel, and variety of products)

Oligopoly

A market structure in which there are relatively few sellers and industry leaders usually determine prices

Perfect competition

A market structure in which there are many businesses selling a lot of identical products for about the same price to many buyers; also known as pure competition

Price competition

A type of rivalry between or among businesses that focuses on the use of price to attract scarce customer dollars

Price discrimination

An illegal activity in which a business charges different customers different prices for similar amounts and types of products

Price fixing

Illegal business agreement in which businesses agree on prices of their goods or services, resulting in little choice for the customer

Private enterprise system

An economic system in which individuals and groups, rather than the government, own or control the means of production—the human and natural resources and capital goods used to produce goods and services

Rebate

A return of part of the price a customer pays for a good or service; usually offered by the product’s manufacturer

Regulated monopoly

Monopoly that the government allows to exist legally

Robinson-Patman Act

A federal regulation that prohibits price discrimination

Scarce

Limited

Sherman Antitrust Act

A federal regulation intended to prevent monopolies from forming and prices from being fixed

Standard of living

The general conditions in which people live; quality of life

Tying agreements

An illegal agreement requiring a customer to buy other products in order to obtain desired goods and services