Business Terms - Chapter 7-9
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17 terms
Terms | Definitions |
|---|---|
 Merit Goods | Goods which are underprovided by private sector businesses. |
| Nationalized industries | Public corporations previously part of the private sector which were taken into state ownership. |
| Natural monopoly | A situation where production costs will be lower if one firm is allowed to exist on its own in the industry, due to the existence of huge economies of scale. |
| Privatization | The transfer of public sector resources to the private sector. |
| Private Finance Initiative (PFI) | A scheme where private business build hospitals and schools for example, funded by government. |
| Public corporations | Organizations set up by law to run services on behalf government. |
| Public goods | Goods where consumption by one person does not reduce the amount available to others an, once provided, all individuals will benefit. |
| Public sector | Business organizations which are owned or controlled by central or local government, or public corporations. |
| QUANGOs | Quasi Autonomous Non-Governmental Organizations. |
| Structure of a business | The way in which a business is organized. |
| Basic economic problem | How scarce resources with different uses are allocated to satisfy wants. |
| Distribution of income | The amount of income and wealth different groups have in a particular country. |
| Economy | A system which attempts to solve the basic economic problem. |
| Market economy/Capitalist economy/Free enterprise economy | An economic system which allows the market mechanism to allocate resources. |
| Market imperfection | Any factor which hinders the free operation of markets, such as where one form dominates resulting exploitation. |
| Opportunity cost | The benefit of the next best option foregone when making a choice between a number of alternatives. |
| Planned economy/Command economy | An economic system in which the state is responsible for resource allocation. |
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