Prelim Review (Applied Economics)

Economics is classified as an Applied Science because it deals with the study of human’s life and how he lives with other men.

• True

• False

The interaction and relationship of the buyers and sellers

• Market

• Market Structure

• External Environment

When demand for goods/service exceeds production capacity, the price of the product increases

• Cost-Push

• Built-In

• Demand-Pull

The remote environment of a firm includes the competitors, suppliers, customers, publics, and intermediaries.

• True

• False

The threat of substitute products increases when the price of the substitute product is higher.

• True

• False

The bargaining power of buyers increases when the switching costs are low.

• True

• False

This segment refers to potential and actual changes in the physical environment and business practices that are intended to positively respond to and deal with those changes.

• Political Factor

• Technological Factor

• Environment Factor

• Socio-Cultural Factor

• Economic Factor

This factor represents how organizations and governments mutually try to influence each other, and how firms try to understand these influences (current and projected) on their strategic actions

• Political Factor

• Technological Factor

• Environment Factor

• Socio-Cultural Factor

• Economic Factor

This factor refers to the nature and direction of the economy in which a firm competes or may compete. Examples are interest rates, inflation rates, business savings rate.

• Political Factor

• Technological Factor

• Environment Factor

• Socio-Cultural Factor

• Economic Factor

This factor is concerned with a society’s attitudes and cultural values.

• Political Factor

• Technological Factor

• Environment Factor

• Socio-Cultural Factor

• Economic Factor