WGU C201 Business Acumen Chapters 3 & 7: Economics and Organizational Structure

Factors Influencing DemandAns>>Demand is driven by price, consumer preferences, the economy, the number of buyers in a market, customer incomes, price of substitutes and complimentary items. Factors of ProductionAns>>Natural resources, capital, human resources and entrepreneurship. What is the key factor influencing demand?Ans>>Price Demand Curve Ans>>A graph of the amount of a product buyers will purchase at different prices. Supply Curve Ans>>Shows the relationship between the price of a good or service and the quantity supplied for a given period of time. Opposite of demand curve. Slopes upwards. Equilibrium PriceAns>>The prevailing market price at which you can buy an item. Where supply and demand pricing meet on the curve. Explain a situation where a supplier would reduce prices.Ans>>The cost of inputs decrease. The cost of technology decreases. The cost of taxes decrease. There are more suppliers. MicroeconomicsAns>>The study of economic behavior among individual consumers, businesses, and families whose collective behavior in the marketplace determines the quantity of goods and services demanded at different prices. Key terms: supply and demand. MacroeconomicsAns>>The study of the broader economic picture and of how an economic system maintains and allocates its resources. MonopolyAns>>Government controls who can enter the industry. Market situation where one producer controls the supply of a good or service, and where the entry of new producers is prevented or highly restricted. Pure CompetitionAns>>It's easy to get into the industry and easy to get out. There is not a large differentiation between the products in the industry or the consumers who purchase the products. OligopolyAns>>Oligopoly is a market structure in which a small number of firms has the large majority of market share. There are few competitors. The ease of entry into industry is somewhat difficult. The similarity of services and goods of competitors is different. Socialism Ans>>Government ownership of major industries like communications. Major industries are too important to be left in private hands. Significant government planning. Only the private sector of the economy generates profit. Government influences career decisions. Incentives are limited. Example- Canada. Healthcare is controlled by government, but citizens can open stores. Capitalism Ans>>Businesses are owned privately. Companies and individuals can earn profits. People have the right to choose a profession. There is more incentive to work hard and innovate. Functional Unemployment Ans>>Individual is temporarily unemployed and looking for a job. Example: new graduates. Seasonal Unemployment Ans>>Individuals are unemployed during slow seasons. The only type of unemployment where the individual is not actively seeking employment. Structural Unemployment Ans>>Individuals are unemployed because there is no demand for their skills. They need retraining. When an individual becomes unemployed as a result of their job becoming obsolete for reasons such as technology. Examples: assembly line workers, toll takers on a bridge transitioning to EZ Pass. Cyclical Unemployment Ans>>Individual becomes unemployed due to an economic slowdown. Example: executives when companies downsize. How do we measure economic growth?Ans>>Productivity - Ratio of outputs to inputs. Gross Domestic Product Ans>>Total output. Total goods and services that are available. How do we measure if growth is sustainable?Ans>>By looking at inflation and deflation. Inflation Ans>>Rising prices caused by a combination of excess demand and increases in the costs of raw materials: component parts, human resources, and other factors of production. Demand is up, and prices for raw materials are up.