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PowerPoint Presentation. Section 1.1 Pages 3-11. 1.1 Entrepreneurship and the Economy. What you’ll learn How small business and entrepreneurship contribute to the economy. 1.1 Entrepreneurship and the Economy. What you’ll learn

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  1. PowerPoint Presentation • Section 1.1 • Pages 3-11

  2. 1.1Entrepreneurship and the Economy What you’ll learn • How small business and entrepreneurship contribute to the economy

  3. 1.1Entrepreneurship and the Economy What you’ll learn • How the laws of supply and demand in the free enterprise system affect entrepreneurship

  4. 1.1Entrepreneurship and the Economy What you’ll learn • The ways in which entrepreneurs contribute to a free enterprise system

  5. 1.1Entrepreneurship and the Economy Why it’s important • Understanding how the economy works is essential to business survival.

  6. 1.1Entrepreneurship and the Economy Why it’s important • The free market system allows entrepreneurs to compete and succeed.

  7. 1.1Entrepreneurship and the Economy Key Terms entrepreneur venture entrepreneurship entrepreneurial economics free enterprise system

  8. 1.1Entrepreneurship and the Economy Key Terms (Cont.) profit services factors of production scarcity demand elastic

  9. 1.1Entrepreneurship and the Economy Key Terms (Cont.) inelastic diminishing marginal utility equilibrium

  10. 1.1Entrepreneurship and the Economy Presentation Outline I. THE ROLE OF SMALL BUSINESS AND ENTREPRENEURSHIP IN THE ECONOMY II. ENTREPRENEURSHIP TODAY

  11. 1.1Entrepreneurship and the Economy Presentation Outline (Cont.) III. THE FREE ENTERPRISE SYSTEM • THE PROFIT MOTIVE • THE ROLE OF COMPETITION IV. ECONOMICS: MAKING CHOICES • GOODS AND SERVICES • FACTORS OF PRODUCTION • SCARCITY

  12. 1.1Entrepreneurship and the Economy Presentation Outline (Cont.) V. THE LAW OF SUPPLY AND DEMAND VI. DEMAND VII. SUPPLY

  13. 1.1Entrepreneurship and the Economy Presentation Outline (Cont.) VIII. SURPLUS, SHORTAGE, AND EQUILIBRIUM VIV. WHAT ENTREPRENEURS CONTRIBUTE

  14. 1.1Entrepreneurship and the Economy Presentation Outline (Cont.) X. SMALL BUSINESSES VERSUS ENTREPRENEURIAL VENTURES • SMALL BUSINESSES • ENTREPRENEURIAL VENTURES

  15. 1.1Entrepreneurship and the Economy I. THE ROLE OF SMALL BUSINESS AND ENTREPRENEURSHIP IN THE ECONOMY A. An entrepreneur undertakes the creation, organization, and ownership of a business.

  16. 1.1Entrepreneurship and the Economy B.Entrepreneurs accept many risks and responsibilities for the sake of profits and personal satisfaction.

  17. 1.1Entrepreneurship and the Economy C. Creating and running a successfulventure, a business undertaking involving risk, requires a variety of skills and knowledge.

  18. 1.1Entrepreneurship and the Economy D. The process of getting into and operating one’s own business is called entrepreneurship.

  19. 1.1Entrepreneurship and the Economy E. Entrepreneurialmeans of or having to do with an entrepreneur or entrepreneurs.

  20. 1.1Entrepreneurship and the Economy II. ENTREPRENEURSHIP TODAY A. About one in three households is involved with a new or small business.

  21. 1.1Entrepreneurship and the Economy B. More than 90 percent of all businesses are small businesses with fewer than 100 employees.

  22. 1.1Entrepreneurship and the Economy C. The global market has resulted in new resources, markets, and ideas.

  23. 1.1Entrepreneurship and the Economy D. There is great pressure for businesses to come up with better services and make more choices available to customers.

  24. 1.1Entrepreneurship and the Economy E.Economics helps explain how entrepreneurs and customers interact in the economy. Economics is the study of the decisions or choices that go into making, distributing, and consuming products.

  25. 1.1Entrepreneurship and the Economy Springboard What goods and services do you buy and what types of jobs would you like to have? ?

  26. 1.1Entrepreneurship and the Economy III. THE FREE ENTERPRISE SYSTEM A. Most democratic nations have a free enterprise system.

  27. 1.1Entrepreneurship and the Economy B. In a free enterprise system, everyone has the right to make economic choices. • C. A free enterprise system is also called capitalism, or a market economy.

  28. 1.1Entrepreneurship and the Economy A. THE PROFIT MOTIVE 1. A primary incentive of free enterprise is to make a profit, money that is left after all the expenses of running a business have been deducted from the income. 2. There is a risk of failure involved in making a profit.

  29. 1.1Entrepreneurship and the Economy 3. The risk of failure serves a positive function in a free enterprise system.

  30. 1.1Entrepreneurship and the Economy B. THE ROLE OF COMPETITION 1. Competition between similar businesses is a key element in a market economy.

  31. 1.1Entrepreneurship and the Economy 2. Businesses compete on the basis of price and non-price factors. 3. In a mature industry, the focus is on lowering prices.

  32. 1.1Entrepreneurship and the Economy 4. In newer industries, price factors are less important than non-price factors.

  33. 1.1Entrepreneurship and the Economy 5. Non-price factors includes the following. • a. Quality • b. Service • c. Reputation

  34. 1.1Entrepreneurship and the Economy Discussion Starter What are some products that are direct competition with each other for customers? ?

  35. 1.1Entrepreneurship and the Economy IV. ECONOMICS: MAKING CHOICES A. Economics is the study of the decisions that go into making, distributing, and consuming products.

  36. 1.1Entrepreneurship and the Economy B. Many economic concepts are already familiar to you in your everyday role as a consumer.

  37. 1.1Entrepreneurship and the Economy VII. GOODS AND SERVICES A. Goods and services are products that our economic system produces to satisfy our wants.

  38. 1.1Entrepreneurship and the Economy B.Goods are tangible (or physical) products. • C.Services are intangible (or conceptual) products.

  39. 1.1Entrepreneurship and the Economy Critical Thinking Make a list of purchases in which quality or service is more important than price. ?

  40. 1.1Entrepreneurship and the Economy B. FACTORS OF PRODUCTION 1. Factors of production are the resources that businesses use to produce the goods and services people want.

  41. 1.1Entrepreneurship and the Economy B. There are four main factors of production. • 1. Land • 2. Labor • 3. Entrepreneurship • 4. Capital

  42. 1.1Entrepreneurship and the Economy C. SCARCITY 1. When wants are greater than resources, the condition is called scarcity.

  43. 1.1Entrepreneurship and the Economy 2. Items that are scarce include the following. • a. Land • b. Labor • c. Capital

  44. 1.1Entrepreneurship and the Economy Discussion Starter Name some businesses that use each of the four factors of production. Support your answers with examples of how. ?

  45. 1.1Entrepreneurship and the Economy V. THE LAWS OF SUPPLY AND DEMAND A. In a free enterprise system, prices are determined in the marketplace.

  46. 1.1Entrepreneurship and the Economy B. Consumers and producers interact in response to the laws of supply and demand.

  47. 1.1Entrepreneurship and the Economy VI. DEMAND A. Demandis the amount or quantity of goods or services that consumers are willing and able to buy.

  48. 1.1Entrepreneurship and the Economy B. According to the law of demand, price is inversely related to demand.

  49. 1.1Entrepreneurship and the Economy C. If a change in price has a significant effect on the quantity demanded, demand for the item is elastic.

  50. 1.1Entrepreneurship and the Economy D. If a change in price has little or no effect on the quantity demanded, demand for the item is inelastic. Demand is inelastic when: 1. No acceptable substitutes available 2. The price change is small relative to buyer income. 3. The product is a necessity.

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