Week One - Week One Lecture and Notes Part One: The Context...

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Week One Lecture and Notes Part One: The Context of Modern Business A. The Economic Environment 1. World’s Economics Systems An economic system is how a society allocates its resources to provide  goods and services Basic Difference: The extent to which the factors of production are  owned and/or directed by private interests, or publicly by the  government o Communism – all factors owned by all the people Government/ Central Planning No Competition Cuba, North Korea o Socialism – some factors owned by all the people Equal allocation of resources Government/ Central Planning for basic goods and  service Most basic industries owned by the government Sweden, India, Israel o Capitalism – factors are privately held and used to make profit Virgin Records, Google, Nike, Home Depot, Bolder  Boulder, Verizon   They are in business to earn profits  by providing products Tangible: cars, food, clothing Intangible: services, ideas Free to succeed or fail Free to make choices
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Product Mix Price Hire/ Fire Adam Smith (1723 – 1790) Scottish Political Economists “The Wealth of Nations”, 1776 Father of Free Trade and Capitalism o Free Market Capitalism (Laissez Faire) Competition will produce the optimal quantity and variety  of goods “The Invisible Hand” Society’s Welfare is Maximized Self- Interested Behavior: Producers Consumers
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This note was uploaded on 05/03/2008 for the course BCOR 1010 taught by Professor Latier,jef during the Spring '07 term at Colorado.

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Week One - Week One Lecture and Notes Part One: The Context...

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