Chapter 1

Chapter 1 - Chapter 1 The Dynamics of Business and...

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Chapter 1 The Dynamics of Business and Economics Objectives o Define basic concepts such as business, product, and profit. o Identify the main participants and activities of business, and explain why studying business is important. o Define economics and compare the four types of economic systems. o Describe the role of supply, demand, and competition in a free-enterprise system. o Specify why and how the health of the economy is measured. o Trace the evolution of the American economy and discuss the role of the entrepreneur in the economy. o Evaluate a small-business owner’s situation and propose a course of action. Business vs. Nonprofit Organization Nonprofit Organization Provides products, especially services, for some purpose other than Business An individual or organization that tries to earn a profit by providing products that satisfy people’s needs, e.g., IBM, Coca-Cola. The Nature of Business o To earn profits by providing products: Tangible Cars, food, clothing Intangible A service An idea The Goals of Business For-Profit Sector: Profit The difference between what it costs to make and sell a product and what the customer pays for it. Nonprofit Sector: Goals May provide goods or services but not for the purpose of earning profits. Overview of the Business World 1
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The People and Activities of Business Activities: Management Marketing Finance People: Owners Employees Customers Other stakeholders: Investors Regulatory Agencies Why Study Business? o To develop skills and acquire knowledge to prepare for your future career o To help you better understand the many business activities that are necessary to provide satisfying goods and services o To help you become a well-informed consumer and member of society Education Pays Economics: Micro vs. Macro Economics —the study of how resources—or factors of production—are distributed for the production of goods and services within a social system. o Microeconomics —the study of small economic units, such as individual consumers, families, and businesses. o Macroeconomics —the study of a nation’s overall economic issues, such as how an economy maintains and allocates resources and how government policies affect the standards of living of its citizens. Types of Resources Used by Business
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Chapter 1 - Chapter 1 The Dynamics of Business and...

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