Introduction to Business & Economics

A business is an organization that provides goods or services to earn a profit. A profit is the difference between the business' revenue and its expenses. In order to earn a profit, a business risks its money and time.

The business environment is the surrounding factors that either help or hinder the development of business; the elements of the business environment include the following: *The economic and legal environment *The technological environment *The competitive envrionment *The global business environment Business people must be aware of all the environments in which they operate. (page 13)

Return on Investment (ROI) is the money gained from taking a business venture risk; in addition to money, investment of time is also an important consideration. (page 14)

-If people feel that the risk is acceptable, they are willing to take the risk of starting businesses.
-Entrepreneuers seek an acceptable return on investment (ROI), the money gained from taking a business venture risk.
-Governments can lessen the risks by passing laws that let business-people write contracts that are enforceable in court, establishing tradable currency, minimizing corruption, and enforcing the Universal Commercial Code (UCC). -(pages 13-29)

-Technology, especially the Internet, increases effectiveness, efficiency, and productivity.
-Buying and selling are easier, both Business to Consumer (B to C) and Business to Business (B to B).
-Technology can be used to improve customer responsiveness.
-Reliance on technology could prove costly without appropriate backups. -(pages 13-29)

-High-quality product must be accompanied by high-quality service at competitive prices.
-Organizations that are consumer-oriented (that listen to the needs and wants of consumers and respond quickly) are more successfulthan those that are not.
-Employee empowerment helps retain quality talent, which ensures that a company's high standards of service and production are met -(pages 13-29)

-A diverse workforce brings fresh, new ideas and reflects the changing U.S. population.
-Managers must frequently deal with vastly different generational attitudes across their workforce. However, the number of Baby Boomers aging out of the workforce could create employment unbalances.
-Catering to the Baby Boomers allows companies to target the richest and fastest growing segment of the U.S. population.
-Employers wishing to maintain quality employees should take into consideration work-life balance. This may require flexible work schedules, caferteria-stle benefits packages, telecommuting, and other family-friendly programs. -(pages 13-29)

-The growth of free trade and international competition means that companies must compete against manufacturers in low-wagecompanies overseas.
-However, businesses of all sizes can compete in the global marketplace, so globalization represents an opportunity as well as a threat.
-International current events, such as the threat of terrorism, the war in Iraq, and th threat of nuclear power in North Korea, have an impact on businesses everywhere -- both positive and negative. -(pages 13-29)

Supply is the willingsness and ability of producers to offer a good or service. Demand is the willingness and ability of buyers to purchase a product (a good or service). The law of demand states that buyers will purchase more of a product as its price drops and less as its price increases. The law of supply states that producers will offer more of a product for sale as the price rises and less as its price drops. -(pages 44-47)

1. The equilibrium price is the point at which the amount of goods sought by buyers is equal to the amount of goods produced by its suppliers. At the equilibrium price, the supply and demand curves cross, and the quantity demanded equals the quantity supplied. -(pages 44-47)

-Decisions about what to produce and in what quantites are driven by marke demands, which means that scarcity or oversupply is quickly controlled. -Businesses and land are owned privately. Because profits are eaped, owners are motivated to work harder.
-Competition exists in different degrees, ranging from perfect to nonexistent.
-The government does not control markets or international trade. Social freedoms include speech, press, assembly, religion, and elections.-(pages 47-55, particularly the table on page 55)

-An economic system based on the premise that some, if not most, basic businesses should be owned by the government so that profits can be distributed among the people.
-Government typically controls education, health care, media, and other basic services. There are some capitalist-stle incentives in place in private businesses, but are limited by government control of wages.
-Some markets are controlled by the government, and there are some international trade restrictions. There are some restrictions on social freedoms, including job choice, education levels, and international movement.-(pages 47-55, particularly the table on page 55)

-An economic and political system in which the state (the government) makes almost all economic decisions and owns almost all the major factors of production.
-Because almost all business is publicly owned, workers have little motivation to work hard or produce high-quality goods or services because they do not profit directly from them.
-Government runs education and health are, and social freedoms are very limited.-(pages 47-55, particularly the table on page 55)

-In this system, the government controls some institutions (such as mail and education), while many businesses are controlled privately and influenced by supply and demand.
-In non government-owned businesses, owners and workers are motivated by realizing profits from higher efficiency and/or quality of goods and services. Government workers may not have this kind of incentive.
-Government controls some trades, markts, and services, but not all. Some government restrictions on social freedoms may include separation of church and state and some controls of assembly. -(pages 47-55, particularly the table on page 55)

The U.S. Economy is a mixed market economy because, although it strives to be as free and open as possible, certain activites are restricted. For example, some proucts cannot be sold legally. Additional restrictions limit the sale of certain products by age group or require advertising to be truthful. -(page 54)