BA 101 Introduction to Business

1. Fundamentals of Business and Economics

What is a Business?

• Goods • Services • Job creation • Tax-base • Investments

• Education • Libraries • Museums • Social services • Charities Capital


Categories of Business Producing Goods Providing Services Capital Intensive Labor Intensive .

Service Sector Growth      More disposable income Lifestyle and demographic changes Complex goods and technologies Need for professional advice Low barriers to entry .

What is Economics? Microeconomics Macroeconomics Economic System .

Factors of Production Resources Capital Entrepreneurs Knowledge .

Economic Systems Free-Market System Planned System Capitalism Mixed Capitalism Socialism Communism Privatization .

Microeconomics The Forces of Supply and Demand .

Supply and Demand  Supply: Specific quantity of a product that the seller is able and willing to provide Demand: Buyers’ willingness and ability to purchase products  .

Understanding Demand Higher Lower Consumer Income Consumer Preferences Price Price of Substitute Products Advertising and Promotion Spending Price of Complementary Goods Expectations About Future Prices Demand Higher Lower .

Understanding Supply Less Supply More Variables Goods and Services Variables Lower Price Higher .

The Relationship between Supply and Demand  Variables that affect supply and demand change simultaneously and continually. thus creating changes in the equilibrium price.  . Both production levels and prices reflect the interaction of supply and demand.

Macroeconomics Issues for the Entire Economy .

Free-Market Competition Pure Competition Monopoly Oligopoly Monopolistic Competition .

Competitive Advantage   Price Speed    Quality Service Innovation .

The Role of Government   Fostering competition Regulating industries   Deregulating industries Protecting stakeholders’ rights  Contributing to economic stability .

Fostering Competition Antitrust Legislation Mergers and Acquisitions .

Regulating and Deregulating Industries Fair Competition Business Ethics Government Regulation Free Competition Working Conditions Public Safety .

Contributing to Economic Stability Economic Expansion Recovery Fiscal Policy Business Cycle Recession Revenue and Spending Interest Rates Business Cycle Monetary Policy Economic Contraction .

Major Economic Indicators Housing Starts Durable-Goods Orders Interest Rates Unemployment Statistics .

Measuring Price Changes Inflation Purchasing Power Deflation Consumer Price Index (CPI) .

Measuring National Output Dollar Value Final Goods and Services Domestic Businesses Foreign-Owned Businesses Overseas Operations Gross Domestic Product (GDP) Yes Yes Yes No Gross National Product (GNP) Yes Yes No Yes .

Ten Economic Performance Indicators Prime Interest Rate Housing Starts Labor Productivity Rate Rate of Inflation Consumer Price Index Unemployment Rate Durable-Goods Orders Balance of Trade Producer Price Index Gross Domestic Product .

What does the future hold?      The aspect of terrorism China in the global economy Work mobility Deficits in budget and balance of trade E-business .

Challenges of Globalization       Quality products and services Changing needs of customers Managing a small business Globalization and workforce diversity Ethics and social responsibility Technology and electronic commerce .

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