Presentation on theme: "Introduction to Business"— Presentation transcript:
1 Introduction to Business In order to appreciate and make informed decisions in the world around them, students will need to establish a basic business/economic foundation.Updated July 2012
2 CH 1 Economic Decisions and Systems How are business decisions affected by consumer behavior?
3 Opening Questions Things I need to survive include ______. Things I want to have include ________.Where do you like to shop? Go out to eat? Go for entertainment?How do companies get your business?What is the whole motivation behind running a business?
4 Chapter 1 Targets Explain the difference between wants and needs. Explain the difference between goods and services.Describe how limited resources relate to wants.Describe basic economic problem and decision makingExplain the different types of economiesDefine Motivation, competition, and profit
5 Wants Vs. Needs WANTS: Things we wish we could have We do NOT have to have them to survive.Public/PrivateNEEDS:Necessary wantsThings we MUST have to survive
6 FYI Goods Vs. Services SERVICES: Task that people or machines perform. Things that can be physically weighed or measured.SERVICES:Task that people or machines perform.Usually to satisfy a wantMore people work in jobs that provide services than jobs that produce goods.FYI
7 Calculate Buying Power GDP = Gross Domestic ProductUse exchange rate of all the finished goods and services produced within a country's borders in a specific time periodPPP or PPP GDP = Purchasing Power ParityTake into account that one dollar can buy more in some countries and less in others.It is a better gauge of the internal size of each market
8 Buying Power 1 2 3 4 5 6 7 8 9 10 USA $14,624,180,000,000 China RankingCountryAmount in PPP GDP1USA$14,624,180,000,0002China10,084,370,000,0003Japan4,308,630,000,0004India4,001,100,000,0005Germany2,932,040,000,0006Russia2,218,760,000,0007Brazil2,181,680,000,0008United Kingdom2,181,070,000,0009France2,146,280,000,00010Italy1,771,140,000,000
9 Economic Resources or Natural Resources Anything that people can use to make or obtain what they need or want.Natural ResourcesHuman ResourcesCapital ResourcesUnlimited Wants vs. Limited ResourcesLimits the number of wants you can satisfy
10 Motivation Forces that causes action Decision-Making Process Choices = trade off or Opportunity CostDecision-Making ProcessDefine the problemIdentify the choicesEvaluate the advantages and disadvantages of each choiceChoose the best alternativeAct on your choiceReview your decision
11 Motivation in a persona and business Needs / WantsProfitMoney left over after expenses are paidBiggest motivation for taking the RISKCompetition
12 3 Economic Questions What goods and services will be produced? How will the goods and services be produced?What needs and wants will be satisfied with the goods and services produced?The word MARKET derives from the Latin Word Mercari which means “TO TRADE.”
13 Economies – method country uses to answer economic questions CommandMarketTraditionalMixed
14 Command (Planned or Managed) A central authority makes the key economic decisions.GovernmentStrong CommandCommunism (State makes all the decisions)North Korea, CubaModerate CommandSocialismSome form of private enterpriseState owns major resources (airports, steel, utilities)France, Sweden, Canada
15 Market EconomyEconomic decisions are made in the marketplace according to the laws of supply and demandPeople have the right to:Own PropertyStart a businessMake Agreements (Contracts)Compete in a MarketplacePlace where buyers and sellers exchange goods and services for some form of money.
16 Traditional Simple economics, no global competition Goods & services produced way it always has been done
17 Mixed Combination of a market and command economy. USA State takes care of people’s needsMarketplace takes care of people’s wants.USAGovernmentDefense, EducationMarketplaceBusiness
18 Your Roles in the Economy ConsumerSelects, purchases, uses goods or servicesProducerWho works/owns a business to earn moneyCitizenVote and participate in governmentAbout 2/3rd of the dollars teenagers spend is their own money earned from jobs or received as gifts and allowances.FYI
19 Chapter 1 Target ReviewExplain the difference between wants and needs.Wants – Things we which we could haveNeeds – Things we MUST have to surviveExplain the difference between goods and services.Goods – Things that can be physically weighed or measuredServices – Tasks that people or machines performDescribe how limited resources relate to wants.Limited resources limit the number of wants people can satisfy
20 Activity Think of the last ‘big’ purchase you made. Write out the Decision Making process you went through:Define the problemIdentify the choicesEvaluate the advantages and disadvantages of each choiceChoose the best alternativeAct on your choiceReview your decision