Lecture Business (4/e): Chapter 1 - Ferrell, Hirt, Ferrell

Chapter 1 - The dynamics of business and economics. After reading this chapter, you will be able to: Define basic concepts such as business, product, and profit; identify the main participants and activities of business and explain why studying business is important; define economics and compare the four types of economic systems; describe the role of supply, demand, and competition in a free-enterprise system; specify why and how the health of the economy is measured.

Part Business in a Changing World © 2015 McGraw­Hill Education 1-2   CHAPTER The Dynamics of Business and Economics CHAPTER Business Ethics and Social Responsibility APPENDIX B The Legal and Regulatory Environment CHAPTER Business in a Borderless World 1-3 Learning Objectives LO 1-1 Define basic concepts such as business, product, and profit LO 1-2 Identify the main participants and activities of business and explain why studying business is important LO 1-3 Define economics and compare the four types of economic systems LO 1-4 Describe the role of supply, demand, and competition in a free enterprise system LO 1-5 Specify why and how the health of the economy is measured LO 1-6 Trace the evolution of the American economy and discuss the role of the entrepreneur in the economy 1-4 The Nature of Business 1-5 The Goal of Business 1-6 People and Activities of Business Management is concerned with acquiring, developing, and using resources effectively and efficiently The focus of all marketing activities is satisfying customers The owner is primarily responsible for obtaining financial resources for the operation of the business, including obtaining money and using money effectively 1-7 Economic Foundations of Business 1-8 Economic Systems 1-9 Free-Enterprise System Free enterprise allows a company to succeed or fail on the basis of market demand Basic individual and business rights which must exist in order to motivate companies to succeed ► Right to own property ► Right to earn profits and use them as one wishes ► Right to determine business operations ► Right to choose 1-10 Forces of Supply and Demand Supply Demand Equilibrium price is the price at which the number of products supplied equals the amount of products consumers are willing to buy at a specific time 1-11 The Nature of Competition Competition is the rivalry among businesses for consumer’s dollars 1-12 Economic Cycles and Productivity May lead to inflation – a continuing rise in prices May lead to recession – a decline in production, employment and income Recessions are often characterized by rising levels of v Unemployment – the condition in which a percentage of the population wants to work but is unable to find jobs 1-13 Economic Cycles and Productivity Severe recession may turn into a v Depression – a condition of the economy in which unemployment is very high, consumer spending is low, and business output is sharply reduced v Gross Domestic Product (GDP) – the sum of all goods and services produced in a country during a year v Budget Deficit – the condition in which a nation spends more than it takes in from taxes 1-14 The American Economy 1-15 Ethics and Social Responsibility in Business ... LO 1- 6 Trace the evolution of the American economy and discuss the role of the entrepreneur in the economy 1- 4 The Nature of Business 1- 5 The Goal of Business 1- 6 People and Activities of Business. .. World 1- 3 Learning Objectives LO 1- 1 Define basic concepts such as business, product, and profit LO 1- 2 Identify the main participants and activities of business and explain why studying business. . . 1- 2   CHAPTER The Dynamics of Business and Economics CHAPTER Business Ethics and Social Responsibility APPENDIX B The Legal and Regulatory Environment CHAPTER Business in a Borderless World 1- 3