AREC 323 Lecture 1: Economic Concepts Review

The quantity of a good or service that producers are willing and able to offer for sale at various prices during a specific period.

The quantity of a good or service that consumers are willing and able to purchase at various prices during a specific period.

A positive relationship between price and quantity supplied. As price increases, the quantity supplied increases, and vice versa.

An inverse relationship between price and quantity demanded. As price decreases, the quantity demanded increases, and vice versa.

Measures how much the quantity demanded of a good responds to a change in its price. Price elasticity of demand is often negative due to the inverse relationship between price and quantity demanded.

Measures how much the quantity supplied of a good responds to a change in its price. Price elasticity of supply is positive due to the direct relationship between price and quantity supplied.

Factors influencing price elasticity of demand. Examples include availability of substitutes, luxury vs necessity, proportion of income spent, time horizon, and market definition.

Factors influencing price elasticity of supply. Examples include time frame, availability of inputs, and flexibility of production.

It indicates if consumers are highly sensitive to price changes. If PED > 1, demand is elastic. If PED < 1, demand is inelastic.

It indicates if consumers are not highly sensitive to price changes. If PED < 1, demand is inelastic.

A good whose demand increases when the price of another good increases. Think of peanut butter and jelly.

A good whose demand decreases when the price of another good decreases. Think of coffee and tea.

The sum of fixed cost and variable cost.

The total revenue received from selling a given quantity of goods. TR = Price x Quantity.

The sum of fixed costs and variable costs divided by the quantity of output produced. It represents the average cost per unit of output.

The change in total cost resulting from producing one additional unit of output. It represents the marginal cost of producing one more unit.

The profit calculated by subtracting the total cost from the total revenue. It reflects the true economic return from a business.

The profit calculated by subtracting accounting costs from total revenue. It ignores implicit costs such as opportunity costs.

The process of taking inputs and adding value to them to create outputs, typically for profit.

A set of activities that involve commercial, industrial, or professional work with the goal of making profit.

The satisfaction a consumer gets from using a product or service.

Refers to increasing the value of a product or service through improvement in its form, time of availability, place of availability, or ease of possession.

A favorable circumstance for a business to introduce a new product or service that addresses a specific demand or gap in the market.

The ability of a business to survive and thrive in the face of challenges and changes.

The process of planning, organizing, leading, and controlling resources to achieve organizational goals.

Setting goals and short-term strategies for the business.

Defining roles, responsibilities, and the organizational structure.

Monitoring and evaluating the performance of the organization.

Influencing, motivating, and guiding employees to achieve goals.

Knowledge of and proficiency in a specialized field.

The ability to work effectively with individuals and teams.

The ability to think abstractly and conceptualize complex situations.

Organizational members who direct and guide the work of others.

Efficient resource utilization ensures that resources are used wisely to achieve organizational goals. This involves minimizing waste and maximizing productivity.

Decision-making involves choosing the best course of action from various alternatives. It's crucial for managers to make informed decisions based on available data and analysis.

Motivation and leadership involve inspiring and guiding employees towards achieving common goals. Effective leaders create a positive work environment, foster teamwork, and empower individuals to perform at their best.

Conflict resolution involves effectively addressing and resolving disagreements or conflicts among individuals or groups within an organization. It aims to create a harmonious work environment.

Risk management involves identifying, assessing, and mitigating potential risks that can affect an organization's operations and goals. It helps to minimize potential losses and maximize opportunities.

Effective communication involves clearly conveying information and ideas to others, both internally and externally. It's essential for building relationships, sharing knowledge, and achieving shared goals.

Innovation and creativity refer to the ability of an organization to develop new products, processes, or ideas. It's essential for staying competitive and meeting changing market demands.

Management strategies are actions firms take to outsmart competitors and gain a competitive advantage. These strategies aim to differentiate the firm, create barriers to entry, and influence market conditions.