Intro to Business Chapter 1
The Nature of Business *
The goal of Business
A business tries to earn a profit by providing products that satisfy people’s needs.
Business’ produce products that have both tangible and intangible characteristics.
Primary goal of a business it to EARN PROFIT.
Quality product = profitability & stability
Stakeholders – employees, investors, customers, community.
Companies concerned with how product effects environ.
All marketing is to satisfy customers needs and wants.
Economics of Business
Economics is the study of distribution of goods and services.
Government owns or controls the production of goods and services.
Communism
When all people, without regard to class, own all the nations resources.
Efficient and equitable, producing less gap between rich & poor.
Socialism
Government owns basic industries
Postal service, telephone, utilities, trans, health care
Individuals own businesses.
Sweden, India, Israel all Socialist.
Govnt planners make best decision for the nation.
Higher taxes and unemployment rates.
Many experience economic difficulties.
Capitalism or free enterprise individuals own and operate the majority of businesses that provide goods and services.
US, Canada, Japan & Australia all Capitalist.
Two forms: Pure and Modified Capitalism.
Free Market System – No government intervention
Modified Capitalism has government intervention and bus. Regulation. *
Mixed Economies
Contain elements from more than one economic systems.
Economic Cycles & Productivity
Economies expand and contract
Expands when people are spending more
Purchases stimulate production and employment
Rapid expansion may result in inflation
Higher prices
Harmful if incomes do not increase
Economic contraction occurs when spending declines.
Contractions lead to recessions and unemployment.
Severe recession may turn into depression such as 1930’s.
War can affect economies, both good and bad.
GDP measures the state of
The goal of Business
A business tries to earn a profit by providing products that satisfy people’s needs.
Business’ produce products that have both tangible and intangible characteristics.
Primary goal of a business it to EARN PROFIT.
Quality product = profitability & stability
Stakeholders – employees, investors, customers, community.
Companies concerned with how product effects environ.
All marketing is to satisfy customers needs and wants.
Economics of Business
Economics is the study of distribution of goods and services.
Government owns or controls the production of goods and services.
Communism
When all people, without regard to class, own all the nations resources.
Efficient and equitable, producing less gap between rich & poor.
Socialism
Government owns basic industries
Postal service, telephone, utilities, trans, health care
Individuals own businesses.
Sweden, India, Israel all Socialist.
Govnt planners make best decision for the nation.
Higher taxes and unemployment rates.
Many experience economic difficulties.
Capitalism or free enterprise individuals own and operate the majority of businesses that provide goods and services.
US, Canada, Japan & Australia all Capitalist.
Two forms: Pure and Modified Capitalism.
Free Market System – No government intervention
Modified Capitalism has government intervention and bus. Regulation. *
Mixed Economies
Contain elements from more than one economic systems.
Economic Cycles & Productivity
Economies expand and contract
Expands when people are spending more
Purchases stimulate production and employment
Rapid expansion may result in inflation
Higher prices
Harmful if incomes do not increase
Economic contraction occurs when spending declines.
Contractions lead to recessions and unemployment.
Severe recession may turn into depression such as 1930’s.
War can affect economies, both good and bad.
GDP measures the state of