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obstacle and achieve any goal that you can set for yourself. Abraham Lincoln
Business Defined
A profit seeking activity that provides goods and services that satisfy consumers needs
Free Enterprise A system in which private businesses are able to start and do business competitively to earn profits, with a minimal degree of government regulation. D. Coping with the Change: - Price change. - New Product Development. - Need Change - Unexpected events occurs.
A. Owners B. Managers C. Employees D. Customers A. Owners People who own a business, as well as those who invest money in one and have right on the business property, do so because they expect to earn profit
B. Managers The person responsible for operating the business may be the owner (an owner-manager also called an entrepreneur) or a professional manager employed by the owner I) The owner-manager sets his or her own objectives II) A professional manager attempts to achieve objectives set by others. They are accountable to the owners of the business
Employees supply the skills and abilities needed to provide a product or service and to earn a profit
D. Consumers
Business Profit The difference between business income (revenue) and business expenses (costs): selling price all costs of making and selling a product including taxes
By conducting a number of activities, business enterprise earns profit. These areRisk-taking Evaluation of demand Efficient management
Economic profit what remains after expenses and opportunity costs are subtracted from income Opportunity cost the cost of choosing to use resources for a purpose, which results in sacrificing the next best alternative for the use of those resources
Economics
Economics: Scarce Resources The study of how Natural resources a society uses its scarce resources Human resources to produce and Capital distribute goods Entrepreneurs and services
Knowledge
Natural Resources Resources provided in limited amounts by nature, such as oil, coal, water and timber etc. Capital Resources Goods produced for the purpose of making other types of goods and services current assets having a short life and are used up in the production process - raw materials, paper etc. fixed capital (long term in nature) used repeatedly in the production process factory buildings, PCs, machinery etc.
Labor Resources The human talent, skills and competence, available in a nation doctors, operators, teachers and so on.
V. ECONOMIC SYSTEMS An economic system is an accepted way of organizing production, establishing the rights and freedom of ownership, using productive resources and governing business transactions in a society. There are 3 basic types of systems
Economic Systems
Capitalism or Free-Market System
Right to ownership
Mixed
Freedom to start a business Both state and private owned industries
Communism
Planned system
V. ECONOMIC SYSTEMS ..
A. Communism/ Planned Economy An economy in which the government owns the productive resources, financial enterprises, retail stores and banks B. Capitalism/ Free Market Private enterprise can produce almost everything
C. Mixed Economy both private and government produce and distribute goods and services
**Government usually plays a role in supplying defense, roads, education, pensions and some medical care In mixed economy, markets are generally free and competitive
V. ECONOMIC SYSTEMS ..
characterized by private ownership of capital and by competition among businesses seeking profit.
Consumers have freedom of choice in purchasing goods and services in selecting an occupation or a school etc
Freedom of enterprise means, businesses and individuals with the capital may enter essentially any legal business venture they wish
Competition refers to the rivalry among businesses for consumer money