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Lecture Business: A changing world - Chapter 1: The dynamics of business and economics

We begin our study of business in this chapter by examining the fundamentals of business and economics. First, we introduce the nature of business, including its goals, activities, and participants. Next, we describe the basics of economics and apply them to the United States economy. Finally, we establish a framework for studying business in this text. | Chapter One The Dynamics of Business and Economics Business Vs. Nonprofit Organization $ Business An individual or organization that tries to earn a profit by providing products that satisfy people’s needs, ex. IBM. Nonprofit Organization Provides products, especially services, for some purpose other than profits, ex. The Salvation Army. 1-1 The People and Activities of Business People: Owners Employees Customers Activities: Management Marketing Finance 1-2 Why Study Business? It provides employment for most people. It provides the majority of products needed to survive and enjoy life. It will help prepare you for your future career. It will help you become a better informed consumer and member of society. 1-3 Types of Resources Used by Business Natural - land, forests, etc. (not made by people) Human - physical/mental abilities used by people to produce goods and services Financial - funds needed to acquire needed natural and human resources 1-4 Basic Questions to Be Asked of . | Chapter One The Dynamics of Business and Economics Business Vs. Nonprofit Organization $ Business An individual or organization that tries to earn a profit by providing products that satisfy people’s needs, ex. IBM. Nonprofit Organization Provides products, especially services, for some purpose other than profits, ex. The Salvation Army. 1-1 The People and Activities of Business People: Owners Employees Customers Activities: Management Marketing Finance 1-2 Why Study Business? It provides employment for most people. It provides the majority of products needed to survive and enjoy life. It will help prepare you for your future career. It will help you become a better informed consumer and member of society. 1-3 Types of Resources Used by Business Natural - land, forests, etc. (not made by people) Human - physical/mental abilities used by people to produce goods and services Financial - funds needed to acquire needed natural and human resources 1-4 Basic Questions to Be Asked of Economic Systems 1. What goods and services and what quantity will satisfy the needs of the consumer? 2. How will the goods and services be produced? Who will produce them and with what resources? 3. How are the goods and services to be distributed to the consumer? 1-5 Comparison of Communism, Socialism, and Capitalism 1-6a Comparison of Communism, Socialism, and Capitalism 1-6b Economic Systems and Where They Occur Communism: China North Korea Cuba Socialism: Sweden India France Israel Capitalism: Canada United States Australia Japan 1-7 Equilibrium Price of Soft Drinks 1-8 1.00 1.35 1.00 0.70 0.40 0 1 2 3 4 5 6 7 Cans of Soft Drinks Prices of Soft Drinks $ Supply Curve Demand Curve Equilibrium Price Four Competitive Environments Pure Competition Many small businesses sell one standardized product. Monopolistic There are fewer businesses than in a competition pure-competition system, and the differences between the goods they sell are small. Oligopoly Very few businesses sell a .