What is the difference between surplus and shortage?

Surplus is when supply exceeds demand; shortage is when demand exceeds supply.

What is equilibrium in a market context?

A state where supply equals demand

What are business classifications?

Categories based on the size and type of business

What are the business functions?

Activities related to production, marketing, finance, and human resources

Which of the following is an advantage of the free enterprise system? Options: It ensures equal wealth distribution among citizens. It encourages innovation and entrepreneurship. It eliminates the possibility of economic recessions. It guarantees employment for all citizens.

It encourages innovation and entrepreneurship.

Which of the following best describes the concept of supply and demand? Options: It is a theory that states the price of a good rises as the supply of that good increases. It is a fundamental concept that states the price of a good is determined by the relationship between its supply and demand. It is a policy that governments use to regulate the economy. It is a marketing strategy used by companies to increase sales.

It is a fundamental concept that states the price of a good is determined by the relationship between its supply and demand.

What is the law of demand?

As the price of a good increases, the quantity demanded decreases, ceteris paribus.

What is the equilibrium price?

The price at which the quantity of the product demanded equals the quantity supplied.

What is a surplus in the context of supply and demand?

A situation where the supply of a product exceeds its demand.

What does the law of demand state?

As the price of a product increases, the demand for it decreases.

What does the law of supply state?

As the price of a product increases, suppliers will offer more of it for sale.

What is meant by "market equilibrium"?

When the demand for a product is exactly equal to its supply.

What happens when there is a decrease in the supply of a product but demand remains constant?

The price of the product increases.

What can cause a movement along the demand curve for a product?

A change in the product's price.

What is a demand curve?

A graph showing the relationship between the price of a product and the quantity of the product that consumers are willing to buy.

What is a price floor?

The minimum price a seller is required to charge for a product or service, often set by the government.

What effect does a price ceiling below the equilibrium price have on the market?

It leads to a shortage of the product.

What is a price ceiling?

The maximum price a seller is allowed to charge for a product or service, set by the government.

What does a shift to the right in the supply curve indicate?

An increase in the quantity of the product supplied at every price.

What is the equilibrium price?

The price at which the quantity demanded by customers is equal to the quantity supplied by sellers. At this price, there is no shortage and no surplus of the product.

Business Concepts Flashcard Flashcards

Student preview

34 questions

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1.

FLASHCARD QUESTION

Front

What is the definition of the free enterprise system?

Back

A system where businesses are free to compete with minimal government intervention.

2.

FLASHCARD QUESTION

Front

What are elements of freedom of ownership?

Back

The ability to own property and resources

3.

FLASHCARD QUESTION

Front

How is competition defined in a business context?

Back

A rivalry among businesses to attract customers

4.

FLASHCARD QUESTION

Front

What must be considered with business risk?

Back

The potential for loss or failure

5.

FLASHCARD QUESTION

Front

How is profit defined?

Back

The total revenue minus total expenses

6.

FLASHCARD QUESTION

Front

What are the costs of being unsuccessful vs benefits of being successful?

Back

Loss of investment vs financial gain

7.

FLASHCARD QUESTION

Front

What is the relationship between supply and demand?

Back

Supply and demand influence each other

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