Download Principles of Business, Finance, and Marketing

Principles of Business, Finance,
and Marketing
Unit 1: The Economy and You
Chapter 2: Economic Resources and Systems
Learning Objectives
After completing this chapter, you’ll be able to:
• Define scarcity
• List the four factors of production
• Identify the differences between market and
command economies
• Explain why most countries prefer a mixed
economy
Scarcity
• The lack of resources
Factors of Production
• all the economic resources necessary to produce
a society’s goods and services
Natural Resources
• raw materials from nature that are used to
produce goods.
Labor Resources
• people who make the goods and services for
which they are paid.
Capital Resources
• the things used to produce goods and services,
such as buildings, materials, and equipment
Entrepreneurship
• the process of recognizing a business
opportunity, testing it in the market, and
gathering the resources necessary to start and
run a business.
Entrepreneur
• an individual who undertakes the creation,
organization, and ownership of a business
Economics
• the study of how individuals and groups of
individuals strive to satisfy their needs and
wants by making choices
Economic Systems
• the methods societies use to distribute resources
Market Economy
• an economic system in which economic
decisions are made in the marketplace
Price
• The amount of money given or asked for when
goods and services are bought or sold.
Supply
• the amount of goods and services that producers
will provide at various prices
Demand
• the amount or quantity of goods and services
that consumers are willing to buy at various
prices
Equilibrium Price
• the point at which the quantity demanded and
the quantity supplied meet
Command Economy
• an economic system in which a central authority
makes the key economic decisions
Mixed Economy
• an economy that contains both private and
public enterprises