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Cards In This Set
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Resources are _______
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Limited
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Economics is the study of...
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Making decisions in the presence of scarce resources.
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____ are anything used to produce a good or service, or achieve a goal
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Resources
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What is scarcity?
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Scarcity means you cannot get all that you want because of limited resources and unlimited wants. This means having one thing means foregoing something else
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What are the four different kinds of resources?
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Labor Capital Material Managerial Talent
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Why are decisions important?
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Because scarcity implies trade offs
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What is the definition of managerial economics?
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The study of how to direct scarce resources in the way that most efficiently achieves a managerial goal.
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Managerial economics answers what three questions?
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What is termed the economics of a business is to determine the key factors that affect the ability of a firm...
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To earn an acceptable rate of return on its owners
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What is the most important economic factors?
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Competition, technology and customers
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What is a manager?
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A manager is essentially a person who is responsible for the allocation of a firms' scarce resources
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What is the managers main goal?
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To maximize profit.
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Opportunity cost of using any resource is...
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What is the opportunity cost of using a resource?
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What firm owners must give up to use the resource
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If you spend $10 million dollars that is earning 10% interest, to start a company, what is the alternative, or opportunity, costs?
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The 10% interest you would gain by keeping it in the bank, not the $10 million
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