Entrepreneurship Mr. Bernstein Entrepreneurship and the Economy, pp 6-9 and Basic Economic Concepts, pp September 2015

Entrepreneurship Mr. Bernstein What is an Entrepreneur? An individual who undertakes the creation, organization, and ownership of a business Examples? What is a venture? A new business undertaking that involves risk Examples? 2

3 Entrepreneurship Mr. Bernstein What is Entrepreneurship? The process of recognizing an opportunity, testing it in the market, and gathering resources necessary to go into business What is Intrapreneurship? The application of entrepreneurship within a large organization

4 Entrepreneurship Mr. Bernstein What is Economics? The study of how people choose to allocate scarce resources to fulfill their unlimited wants What is an Economic System? A set of laws, institutions and activities that guide economic decision making

5 Entrepreneurship Mr. Bernstein The Free Enterprise System: Capitalism Individual Economic Freedom – Individuals can choose what they wish to buy – Individuals can choose to own private property – Individuals can start business ventures and compete with other businesses Role of Competition – Provides consumers choices – Forces businesses to improve quality and become more efficient – Reduces prices Also known as a Market Economy

6 Entrepreneurship Mr. Bernstein Market Structure: The Nature and Degree of Competition Monopoly Oligopoly Perfect Competition Monopolistic Competition Entrepreneurs are more likely to succeed in which market structure(s)?

7 Entrepreneurship Mr. Bernstein Market Structure: The Nature and Degree of Competition List three companies that are in direct competition with each other. What are the products they use to compete? What are the relative prices of the products? In addition to product quality and price, in what other dimension do the businesses compete? Which product would you choose and why?

Entrepreneurship Mr. Bernstein Factors of Production Land Labor Capital Entrepreneurship Which factor is generally in the shortest supply? Can the supply of the Factors of Production effect the overall economy? 8

Entrepreneurship Mr. Bernstein Supply and Demand Equilibrium Price: Where Supply Curve Meets Demand Curve 9

Entrepreneurship Mr. Bernstein Supply and Demand Equilibrium Price: Where Supply Curve Meets Demand Curve 10

Entrepreneurship Mr. Bernstein Supply and Demand Increase in Demand: Demand Curve shifts and now meets Supply Curve at new Equilibrium 11

Entrepreneurship Mr. Bernstein Supply and Demand Increase in Supply: Supply Curve shifts and now meets Demand Curve at new Equilibrium 12

Entrepreneurship Mr. Bernstein Supply and Demand Elastic demand: As prices rise or fall, demand changes Inelastic demand: As prices rise or fall, there is little effect on demand 13

Entrepreneurship Mr. Bernstein Supply and Demand Relationship between Supply, Demand, Price and Productivity A rise in Productivity reduces costs and causes a rise in Supply 14

Entrepreneurship Mr. Bernstein Economic Indicators and the Business Cycle GDP – measurement of total productivity Underground economy Business Cycle and psychology Government effect – Monetary and Fiscal policies 15