Entreprenuership Chapter 2 overview

2.1 Entrepreneurs Satisfy Needs and Wants

In Economics, your main goal is to satisfy the customer.
You have three resources to produce goods in economics - natural resources, human resources, and capital resources
Entrepreneurs are very important to the economy. They supply goods, create jobs, and serve as agents for change

2.2 How Economic Decisions Are Made

There are four kinds of economic systems -- command economy, market economy, mixed economy, and traditional economy.

The U.S. economic system is based on the principles of private property, freedom of choice, profit, and competition

Economic choices are necessary because of unlimited ability of desire and the scarcity of resources available to satisfy them. Every decision has a cost.

The functions of business are production, marketing, management, and finance. Each function depends on the others.

2.3 What affects Price?

Supply is how much of a good or service a producer is willing to produce at different prices. Demand is an individual's need or desire for a product.
Entrepreneurs must consider all the resources that go into producing a good or service to determine a price. Fixed costs remain the same regardless of how much of a good or service is produced. While variable goes up and down.
Market structure is determined by the nature and degree of competition among businesses tat operate in the same industry. The four major market structures are perfect competition. monopolistic competition, oligopoly, and monopoly.


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