Chapter one - Review the Facts A. The four factors of...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Review the Facts A. The four factors of production (natural resources, human resources, physical capital, and entrepreneurship) are interrelated because most business endeavors and economies require all four factors to operate. All economic activity requires entrepreneurial behavior to combine the other three factors into business activity. Sometimes government serves as the entrepreneur in an economy, often lacking the creativity and willingness to accept risk necessary to have a successful economy. B. In a planned economy the government controls the factors of production and replaces the entrepreneur. A market economy relies on competition in the marketplace to efficiently allocate the resources in the economy. C. Profit motive is the stimulation that prompts a person to do something when the reward is greater than the sacrifice. D. Gross profit is the amount received (benefit) less the amount paid (sacrifice) for product sold. Net profit is the excess of benefits over sacrifices after taking all expenses into account. E.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/16/2011 for the course ACCT 2113 taught by Professor Staff during the Fall '11 term at University of Central Oklahoma.

Page1 / 4

Chapter one - Review the Facts A. The four factors of...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online