1. The Dynamics of Business and Economics
Chapter 1

2. The Nature of Business To create profits by:
Selling products – Cars, food, clothing
Providing services – Healthcare, insurance
Tell me more services -

3. Business vs. Nonprofit Organization
An individual or organization that tries to earn a profit by providing products that satisfy people’s needs, ex. IBM, Coca-Cola
Nonprofit Organization
Provides products, especially services, for some purpose other than profits, ex. The Salvation Army, 4300 American colleges & universities.

4. The Goals of Business For-Profit Sector: Nonprofit Sector:
PROFIT – the difference between what it costs to make and sell a product and what the customer pays for it.
Nonprofit Sector:
GOALS – may provide goods or services but not for the purpose of earning profits

5. The People and Activities of Business
Owners
Employees
Customers
Other stakeholders:
Investors
Regulatory Agencies
Activities:
Management
Marketing
Finance

6. Why Study Business? It provides employment for most people.
It provides the majority of products needed to survive and enjoy life.
It will help prepare you for your future career.
It will help you become a better informed consumer and member of society.
You get to have me as a teacher!

7. Education Pays Median Weekly Salary & Unemployment Rate By Education Level

8. Economics
Economics is the study of how scarce resources are used to produce outputs—goods and services, in other words the study of how individuals and groups of individuals strive to satisfy their needs and wants by making decisions within a social system

9. Types of Resources Used by Business
Natural
land, forests, etc. (not made by people)
Human
physical/mental abilities used by people to produce goods and services
Financial
funds necessary to acquire needed natural and human resources

10. What Is An Economic System?
The way a society distributes its resources to produce goods and services.
Addresses the issue of how to fulfill unlimited demand with limited supply of resources. (Scarcity)

11. Economic Systems attempt to answers 3 Questions
What should be produced?
How should it be produced?
Who should share in what is produced?

12. Types of Economic Systems
Communism
Socialism
Capitalism
Mixed

13. Comparison of Communism, Socialism, and Capitalism

14. Comparison of Communism, Socialism, and Capitalism

15. Economic Systems and Where They Occur
Communism: Socialism: Capitalism:
China Sweden United States
North Korea Germany Canada
Cuba France Australia
Viet Nam Israel Japan
Laos Denmark Brazil

16. Mixed Economies
Most countries of the world have elements of more than one economic system.

17. The Free-Enterprise System
Individuals can own property and pass it on to their heirs.
People and businesses can earn profits and use them as they wish.
Individuals and businesses can determine how their businesses operate.
Individuals can choose their career, where to live, and what to buy.

18. Supply and Demand Demand: Supply:
The number of products business is willing to sell at different prices at a specific time.
An upward sloping curve on a graph.
Demand:
The number of goods and services that customers are willing to buy at different prices at a specific time.
A downward sloping curve on a graph.

19. Equilibrium Price of Handmade Rugs
Prices of Rugs
(dollars)
$800
Equilibrium
Price
$650
$500
$350
$200 1 2 3 4 5 6 7
Handmade Rugs

20. Equilibrium Price
The price at which the number of products that businesses are willing to supply equals the amount of products that consumers are willing to buy at a specific moment in time

21. Four Competitive Environments
Pure Competition Many small businesses sell one standardized product. Monopolistic There are fewer businesses than in a competition pure-competition system, and the differences between the goods they sell are small. Oligopoly Very few businesses sell a product; the product they sell can be similar or different. Monopoly There is only one producer of a product in a given market.

22. Business Cycle
The rise and fall of the economic activity over time (Draw)
Prosperity – is a peak of economic activity
Recession – economic activity slows, Decline in GDP for 2 quarters
Depression – Deep recession that affects the entire economy & lasts for several years
Recovery – Economic activity picks up and consumer confidence rises, which leads to more spending
Contractions vs. Expansions
Inflation – Rise in the price of goods/services

23. Economic Indicators What is an economic indicator? Why do they matter?
What are some?

24. Growth of The American Economy
The Early
Economy
The Industrial
Revolution
The Manufacturing and Marketing Economies
The Service & Internet-based Economy

25. Explore Your Career Options
What are some of the changes in the work environment that contribute to the transformation of the traditional career track?
FAST FACT:
Enterprise Leasing is one of the nation’s largest
employers of college graduates, hiring over
8000 graduates in 2011