Entrepreneurship 3209

Scarcity Definition of scarcity

Systems of economics: A way of dealing with the selection, production, distribution, and consumption of goods and services in society. Government and business work together to foster activity and growth in the marketplace.

Subsistence Economy Barter Economy Market Economy Produces only enough output for its own consumption and does not attempt to accumulate wealth Barter Economy Lacks a commonly accepted currency, so all exchanges must be made with goods and services because money does not exist Market Economy Economy where there is free competition and prices are determined by the interaction of supply and demand.

Money? All money has 3 common characteristics: It serves as a medium of exchange It is a unit of account It is a store of value.

What is “Business”? The process of using resources to provide a good or service to help meet the needs and wants of consumers with the intent of earning a profit. Synonyms: enterprise, firm, company, organization.

Supply and Demand Demand Law of Demand Quantity of a good or service that consumers are willing to buy at a particular price Law of Demand Demand goes up when prices go down. Demand goes down when prices go up.

What creates demand? Consumers must know about it and be interested in it (marketing and ads help) Businesses must have enough supply Must make prices reasonable and competitive Must be accessible to purchase (Location! Location! Location!)

Supply Supply Law of Supply: Quantity of goods and services consumers demand can be provided at prices they are willing to pay Law of Supply: Supply goes up when prices go up. Supply goes down when prices go down.