Download
1 / 36
450 likes | 574 Views
Discover the fundamental aspects of business, economics, and external influences. Learn about economic systems, competition, and government's role in managing the economy. Gain insights into functional areas of business and career options.
E N D
Exploring Business v. 2.1 By Karen Collins
Chapter 1 The foundations of business
chapter objectives • Identify the main participants of business, the functions that most businesses perform, and the external forces that influence business activities. • Define economics and identify factors of production. • Explain how economists answer the three key economics questions. • Compare and contrast economic systems. • Describe perfect competition, and explain how supply and demand interact to set prices in a free market system. • Describe monopolistic competition, oligopoly, and monopoly. • Understand the criteria used to assess the status of the economy. • Discuss the government’s role in managing the economy.
Course objectives • Learn about the functional areas of business • See how these areas fit together • Explore critical issues affecting businesses • Discuss majors and career options
business • As opposed to not-for-profit organizations, which spend all revenue on operating costs. • any activity that provides goods or services for the purpose of making a profit
BUSINESS TODAY • Internet/Social Networks • Technology • Global Expansion • Diverse Workforce • Corporate/Management Behavior • Overcome financial crisis
FUNCTIONAL AREAS OF BUSINESS: MANAGEMENT • planning, organizing, staffing, directing, and controlling a company’s resourceS TO achieve its goals
FUNCTIONAL AREAS OF BUSINESS: OPERATIONS • converting resources into goods or services, ensuring that products are of high quality
FUNCTIONAL AREAS OF BUSINESS: MARKETING • All of the organizational activities involved in identifying customers’ needs and designing, pricing, promoting and delivering products to meet those needs
FUNCTIONAL AREAS OF BUSINESS: ACCOUNTANTS • measure, summarize, and Communicate financial and managerial information
Economics • study of the production, distribution, and consumption of goods and services
The circular flow of inputs and outputs Outputs: Goods and Services Pay revenue for outputs • HOUSEHOLDS: • Buy products from firms • Provide inputs to firms • BUSINESSES: • Produce and sell products to households • Buy inputs from households Pay incomes for inputs Inputs: Labor, Capital, Land, Entrepreneurship
Economists’ questions • What goods and services should be produced? • How should goods and services be produced? • Who receives the goods and services produced?
The spectrum of economic systems Planned Systems Free Market Systems Capitalism Communism Socialism • High degree of government control • High level of social services • Low degree of government control • Low level of social services
Perfect competition Many Sellers Standardized Product Many Consumers
Supply and demand Supply Price EQUILIBRIUM POINT Demand Units
Monopolistic competition Many Sellers Differentiated Product Consumers Group A Consumers Group C Consumers Group B
OLIGOPOLY Seller A Seller B Similar Product Consumer Group A Consumer Group C Consumer Group B
MONOPOLY Seller Consumer B Consumer C Consumer A Consumer E Consumer D
Measuring World Economic Goals • Growth—Gross Domestic Product • High Employment—Unemployment Rate • Price Stability—Consumer Price Index
Gross Domestic Product • the market value of all goods and services produced by the economy in a given year includes only those goods and services produced domestically
BUSINESS CYCLE PROSPERITY RECOVERY RECOVERY GDP % Change RECESSION DEPRESSION Time
Economic indicators • Lagging economic indicators: measures that report the status of the economy a few months in the past. • Leading economic indicators: predict the status of the economy months into the future (e.g. Consumer Confidence Index, Unemployment Claims). • statistics that provide valuable information about the economy
