CHAPTER 1: The Foundation of Business Sections: 1. Getting Down to Business 2. What is Economics 3. Perfect Competition Supply & Demand 4. Monopolistic Competition Monopoly/Oligopoly 5. Measuring the Health of the Economy 6. Governments Role in Managing the Economy (cases and problems)

1.GETTING DOWN TO BUSINESS What is the purpose of business? How does a not-for-profit business differ? Who are the three participants in business? And what do they do? What are the five functional areas of business? What do they do? What external forces influence business?

2.What is Economics What is the definition of economics? What are the factors of production? What do economists study? What are the three questions they ask? What is the difference between a planned economic system and a free market system? How do these systems work? What is a mixed market system? Privatization?

3.Perfect Competition Supply & Demand What is a perfect competition market? What is the definition of supply in that type of market? What is the definition of demand in that type of market? Explain how you would use a demand curve and supply curve to determine equilibrium price.

4.Monopolistic Competition Monopoly/Oligopoly What is monopolistic competition? Describe a market where this is present What is an oligopoly? Describe a market where this is present What is a monopoly? What is the difference between a natural and legal monopoly? Give examples of both

Measuring the Health of the Economy What are the three shared goals of the world’s economy? What is GDP? Describe the four phases of a business cycle What percentage is considered full employment? What does the unemployment rate measure? Explain price stability, inflation and deflation What does the CPI measure and by what method? What is an economic indicator? What is the difference between lagging and leading indicators? What is the consumer confidence index and what does it measure?

Governments Role in Managing the Economy What does monetary policy control? How does it work? How does the government use fiscal policy to influence the economy? How does this influence national debt? What is the difference between micro and macro economics?

Cases & Problems Assignment The class will be divided into 4 groups: Groups 1 and 3 will answer question 1 in the cases and problems section of chapter 1. Groups 2 and 4 will answer question 2 in the cases and problems section of chapter 1. All four groups will answer question 3 in the cases and problems section of chapter 1. Be prepared to discuss your answers in your groups in the next class session