EGC1 Chapter 3
Demand is a schedule or a curve that shows the various amounts of a product that consumers
are willing and able to purchase at each of a series of possible prices during a specified period
Because price and quantity demanded are in
EGC1 Chapter 33
Monetary policy Such policy consists of deliberate changes in the money supply to influence
interest rates and thus the total level of spending in the economy.
Businesses need to have money available to pay for labor, materials, power, and
EGC1 Chapter 31
Money is a medium of exchange that is usable for buying and selling goods and services.
Money is also a unit of account. Society uses monetary unitsdollars, in the United States
as a yardstick for measuring the relative worth of a wide var
EGC1 Chapter 32
The United States, like most other countries today, has a fractional reserve banking system
in which only a portion (fraction) of checkable deposits are backed up by reserves of currency in
bank vaults or deposits at the central bank.
EGC1 Chapter 30
Fiscal policy consists of deliberate changes in government spending and tax collections
designed to achieve full employment, control inflation, and encourage economic growth.
When recession occurs, an expansionary fiscal policy may be in o
EGC1 Chapter 25
Economists define and measure economic growth as either:
An increase in real GDP occurring over some time period.
An increase in real GDP per capita occurring over some time period.
The mathematical approximation called the rule of 70 prov
EGC1 Chapter 26
Business cycles are alternating rises and declines in the level of economic activity, sometime
over several years.
At a peak, such as the middle peak, business activity has reached a temporary maximum. Here
the economy is near or at full e
EGC1 Chapter 29
Aggregate demand is a schedule or curve that shows the amount of a nations output (real
GDP) that buyers collectively desire to purchase at each possible price level.
A change in the price level produces a real-balances effect. Here is how
EGC1 Chapter 24
National income accounting operates in much the same way for the economy as a whole. The
Bureau of Economic Analysis (BEA), an agency of the Commerce Department, compiles the
National Income and Product Accounts (NIPA) for the U.S. economy
EGC1 Chapter 18
Antitrust policy consists of laws and government actions designed to prevent monopoly and promote
Industrial regulation pertains to government regulation of firms prices (or rates) within selected
EGC1 Chapter 4
Elasticity extends our understanding of markets by letting us know the degree to which changes
in prices and incomes affect supply and demand.
The responsiveness (or sensitivity) of consumers to a price change is measured by a products
EGC1 Chapter 17
The total product, which is what the customer buys, includes the physical product, brand
name, accessories, after-sales service, warranty, instructions for use, company image, and
Promotion, one of the basic elements of the market
EGC1 Chapter 11
Monopolistic competition, which is characterized by (1) a relatively large number of sellers, (2) differentiated
products (often promoted by heavy advertising), and (3) easy entry to, and exit from, the industry.
Small market shares Each f
EGC1 Chapter 15.2
Indirect exporting - The exporting of goods and services through various types of home-based
Direct exporting - The exporting of goods and services by the firm that produces them.
Sales company - A business established for the
EGC1 Chapter 14.2
Market screening is a modified version of environmental scanning in which the firm identifies
markets by using the environmental forces to eliminate the less desirable markets.
Environmental scanning, from which market screening is deriv
EGC1 Chapter 11.2
Labor quality refers to the attitudes, education, and skills of available employees. Labor
quantity refers to the number of available employees with the skills required to meet an
employers business needs.
Although classical economists a
EGC1 Chapter 6
Utility is want-satisfying power. The utility of a good or service is the satisfaction or pleasure
one gets from consuming it.
Utility and usefulness are not synonymous. Paintings by Picasso may offer great utility to art
connoisseurs but a
EGC1 Chapter 10
Pure monopoly exists when a single firm is the sole producer of a product for which there are
no close substitutes.
Single seller A pure, or absolute, monopoly is an industry in which a single firm is the sole
producer of a specific good o
EGC1 Chapter 8
Pure competition involves a very large number of firms producing a standardized product (that is, a
product like cotton, for which each producers output is virtually identical to that of every other
producer.) New firms can enter or exit th
EGC1 Chapter 9
Entry and exit only The only long-run adjustment in our graphical analysis is caused by the
entry or exit of firms. Moreover, we ignore all short-run adjustments in order to concentrate on
the effects of the long-run adjustments.
EGC1 CHAPTER 7
A firms explicit costs are the monetary payments it makes to those from whom it must
purchase resources that it does not own. Because these costs involve an obvious cash
transaction, they are referred to as explicit costs.
A firms implicit
EGC1 Chapter 5.2
They are probably also oblivious to the fact that many societies consider their culture superior to
all others (ethnocentricity) and that their attempts to introduce the German way or the
American way may be met with stubborn resistance.
EGC1 Chapter 4.2
One notable aspect of this new institutional theory, as it is known, is that institutions are seen
as a collection of norms that regulate the relations of individuals to each other.
Formal institutions influence behavior through laws and
EGC1 Chapter 1
Scarce economic resources mean limited goods and services. Scarcity restricts options and
demands choices. Because we cant have it all, we must decide what we will have and what
we must forgo.
Opportunity costs: To obtain more of one thing,
EGC1 Chapter 1.2
A multidomestic company (MDC) is an organization with multicountry affiliates, each of which
formulates its own business strategy based on perceived market differences.
A global company (GC) is an organization that attempts to standardize
EGC1 Chapter 2.2
Foreign sourcing, the overseas procurement of raw materials, components, and products.
Foreign investment can be divided into two components: portfolio investment, which is the
purchase of stocks and bonds solely for the purpose of obtain