EB - The Economics of Business Overview
The Economics of Business Overview
Key Terms
B2B – Business to Business model in which a business’ main customer is other businesses.
B2C – Business to Consumer model in which a business’ main customer is the end consumer.
Business cycle – An economic measure of the stability of an economy.
Command economy – An economic system in which economic decisions are made by a central authority such as the government.
Consumption – Spending by households on goods and services.
Contraction – When the economy is decreasing, and economic indicators are decreasing.
Depression – When GDP decreases for more than 2 quarters
Durable goods – Goods that will last more than 3 years.
Economic utility – The perceived usefulness of purchasing a good or service.
Expansion – The point in an economy that economic indicators are increasing, and the economy is growing.
Form utility – Increasing the value of an item by changing its physical form.
Goods – Tangible products to be sold.
Gross Domestic Product – An economic measure of the total production in a country.
Investment – A measure of the amount of capital investment and inventories in the country.
Market economy – An economic system in which economic decisions about production and price are made by producers and consumers, involving little government intervention.
Mixed economy – An economic system in which some economic decisions are made by the government and some are made by producers and consumers.
Net Exports – The amount of exports in a country minus the imports from other countries.
Non-durable goods – Goods that will last less than 3 years and are available for immediate consumption.
Opportunity costs – The value of tradeoffs.
Peak – The point in an economy that economic indicators are at their highest growth point.
Place utility – Increasing the value of a product by making it easy for consumers to access the product.
Possession utility – Increasing the value of a product by making it easy for consumers to possess it.
Price – The monetary value businesses place on a product.
Recession – When GDP decreases for 2 or more quarters.
Scarcity – Limited resources are used to satisfy unlimited wants, also called the basic economic problem.
Services – Intangible products that are provided for consumers.
Specialization – Production efficiency achieved by workers doing one job rather than a lot of jobs.
Time utility – Increasing the value of a product by having it available when the consumer wants or needs it.
Tradeoff – Things that are given up to have something else.
Trough – When the economy is at its lowest point.
Unemployment Rate – The percentage of people in an economy that are unemployed and looking for work.
Module Lessons Preview
In this module, we will study the following topics:
Basic Economics: Understand how societies handle the basic economic problem and how businesses provide goods and services that are useful to people. This lesson compares and contrasts the economic systems to illustrate why economies make the decisions they do.
Business Cycle and Stability: The economy goes up and down, but why and how? This lesson explains why the economy changes and how to understand what is happening. It also explores how the United States uses the Federal Reserve system to control the economy and keep the U.S. stable. Students will perform an analysis of the current economic conditions.
Predictive Analytics: This lesson explores how businesses use big data to predict consumer behavior. How do they know you really want that new game? They use predictive analytics to determine your wants and needs. This can be very good for you because you get the information you need about products and services with very little, if any, effort. Students will discuss how predictive analytics are used in various industries.
The Importance of Entrepreneurship: In this lesson students explore how entrepreneurs impact society in many important ways. Without entrepreneurship we wouldn’t have all of the modern conveniences we’ve come to expect (like cell phones!). Entrepreneurs and small businesses are vital to the success of the United States.
Business Models: In this lesson we learn how businesses use the two main business models, business to business and business to consumer. Businesses market to these two models in different ways, so it is important to understand which model your business uses.
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