Economics Theme 1.1

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The economic problem
People, businesses or government have unlimited wants but face limited resources. This means that they have to make choices because resources are scarce.
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Trade Off
When a choice is made the thing that is given up is the opportunity cost
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Opportunity Cost
Benefit from the next best alternative that has been given up.
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Profit Maximisation
Profits are maximised when marginal revenue= marginal cost
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Sales Maximisation
When the firm sells asa much as possible without making a loss
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Satisficing
Satisficing is to make enough profit to keep shareholders happy or it's sufficient for investors to maintain confidence win the management they appoint.
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Survival
Making sure that the business is still making enough profit to be on the market
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Market Share
The portion of a market controlled by a particular company or product
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Growth
When a company generates significant positive cash flow, or earnings which increase at significantly faster rates than the overall economy
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Cost efficiency
Trying to get the costs as low as possible
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Return on investments
Making back the money that they put in and/ or make a profit
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Employee Welfare
Trying to make sure that the employees are happy and well looked after
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Customer Satisfaction
Making sure that your customers are happy with the products.
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Environmental/ Sustainability
Trying to make the business better for the environment
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Community/ Social
Helping those in need to get what they need.
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Stakeholder
Any person or group who is affected by a business they have an interest in. It can influence or be influenced by the business
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Corporate Social Responsibility
Involves businesses behaving in an ethical way and accepting responsibility for its effects on all stakeholders
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Other cards in this set

Card 2

Front

When a choice is made the thing that is given up is the opportunity cost

Back

Trade Off

Card 3

Front

Benefit from the next best alternative that has been given up.

Back

Preview of the back of card 3

Card 4

Front

Profits are maximised when marginal revenue= marginal cost

Back

Preview of the back of card 4

Card 5

Front

When the firm sells asa much as possible without making a loss

Back

Preview of the back of card 5
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