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Busn 101 Chapter 1

Busn 101 Chapter 1 - Busn101 Chapter 1 19:08 Key Concepts...

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Busn101 Chapter 1 19:08 Key Concepts: Profit: The primary goal of all businesses is to earn a profit Nonprofit Organizations: Although they may provide goods or services they do not have the fundamental purpose of earning profits. ex: Greenpeace, Special Olympics… etc. Management o Concerned with acquiring, developing, and using resources effectively and efficiently o Making decisions to ensure the business achieves its short and long term goals is a vital part of management Marketing o Includes all the activities designed to provide goods and services that satisfy consumers needs and wants. o Use promotion-advertising, personal selling, sales promotion, and publicity to communicate the benefits and advantages of their products to consumer and increase sales Finance o It is the primary responsibility of the owners to provide financial resources for the operation of the business o Owners have the ost to lose if the business fails to make a profit o Sometimes have to borrow money to get started or attract additional owners who become partners or stockholders o Owners of small businesses often rely on bank loans for funding Economics o The study of how resources are distributed for the production of goods and services within a social system. Resources o Human (labor), natural (land, minerals, water…etc.), and financial (capital, the funds used to acquire the natural and human resources needed to provide product) Communism
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o No regard to class, own all the natural resources. o The people (through the government) own and operate all businesses and factors of production o Less of a gap between rich and poor o Marked by low standards of living, critical shortages of consumer goods, high prices, and little freedom. Socialism o Government owns and operates basic industries – postal service, telephone, utilities, transportation, health care, banking, and some manufacturing. But individuals own most businesses. o Citizens are dependent on the government for many goods and services. o Permits a higher standard of living than other economic systems, but it applies to the nation as a whole rather than to an individual. Capitalism o Individuals own and operate the majority of businesses that provide goods and services. o Pure capitalism: Free-market system, all economic decisions are made without government intervention. (Laissez-Faire: government doesn’t interfere) o Modified Capitalism: The government intervenes and regulates business to some extent (laws). Mixed Economies o Has elements from more than one economic system Free Enterprise o Provides the opportunity for a business to succeed or fail o the basis of market demand o Basic individual rights: To own property and to pass this property on to their heirs.
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