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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 |
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Creditors |
Individuals or businesses to whom a business owes money or from whom it wants to borrow money |
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Demand |
The quantity of a good or service that buyers are ready to buy at a given price at a particular time |
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Economy |
The system in which people make and spend their incomes |
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Efficiency |
Accomplishing a task with a minimum expenditure of time and effort |
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Expenses |
The money that a business spends |
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Gross profit |
Money left after the cost-of-goods expense is subtracted from total income |
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Income |
The money received by resource owners and by producers for supplying goods and services to consumers |
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Net profit |
Money left after the cost-of-goods expense and the operating expense are each subtracted from the total income |
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Operating expenses |
All of the expenses involved in running a business |
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Pricing |
A marketing function that involves determining and adjusting prices to maximize return and meet customers’ perceptions of value |
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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 |
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Profit |
Monetary reward a business owner receives for taking the risk involved in investing in a business |
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Profit motive |
The desire to make a profit, which moves people to invest in business |
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Resources |
Items that are used to accomplish another activity, such as producing/providing goods and services |
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Risk |
The possibility of loss or failure |
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Suppliers |
Vendors; businesses from which other businesses buy goods or services |
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Taxes |
Monies that individuals or businesses must pay to the government |
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Celler-Kefauver Antimerger Act |
A federal regulation intended to protect competitors from takeovers that would limit competition |
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Clayton Act |
A federal regulation intended to prevent specific business actions that might prohibit competition (e.g., tying agreements and exclusive agreements) |
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Competition |
The rivalry among two or more businesses to attract scarce customer dollars |
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Direct competition |
Rivalry between or among businesses that offer similar types of goods or services |
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Efficient |
Using minimum amounts of resources to the best advantage |
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Exclusive agreement |
An illegal agreement that forbids customers from buying goods and services from competitors |
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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 |
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Indirect competition |
Rivalry between or among businesses that offer dissimilar goods or services |
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Market structure |
The type of market, or environment, in which businesses operate |
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Monopolistic competition |
A type of market structure in which a lot of businesses sell similar products that have only a few differences |
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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 |
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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) |
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Oligopoly |
A market structure in which there are relatively few sellers and industry leaders usually determine prices |
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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 |
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Price competition |
A type of rivalry between or among businesses that focuses on the use of price to attract scarce customer dollars |
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Price discrimination |
An illegal activity in which a business charges different customers different prices for similar amounts and types of products |
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Price fixing |
Illegal business agreement in which businesses agree on prices of their goods or services, resulting in little choice for the customer |
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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 |
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Rebate |
A return of part of the price a customer pays for a good or service; usually offered by the product’s manufacturer |
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Regulated monopoly |
Monopoly that the government allows to exist legally |
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Robinson-Patman Act |
A federal regulation that prohibits price discrimination |
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Scarce |
Limited |
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Sherman Antitrust Act |
A federal regulation intended to prevent monopolies from forming and prices from being fixed |
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Standard of living |
The general conditions in which people live; quality of life |
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Tying agreements |
An illegal agreement requiring a customer to buy other products in order to obtain desired goods and services |