Goods, Services, Ideas

Goods: tangible (can touch) products. Services: Intangible (experiences). Ideas: Concepts that guide actions (collaboration)

Profit, Revenue, Entrpreneurship

Profit: What business earns above what it spends for salaries, taxes, expenses. What owner gets to keep. Revenue: What business gains from products during given period. Euntrpreneurship: person who risks time+money in running a business.

Stakeholders

People who gain or lose by policies + activities of a business, who the concern addresses.

Non-profit organization, Social Entrpreneurs

Non-profit organization: No leader/organizer that have a personal profit. Social entrepreneurs: who uses business's principles to start/manage non-profits and address issues.

Offshoring, Outsourcing and insourcing

Offshoring: Purchasing inputs from outside of the country. Outsourcing: Partnering w/ other companies to do all or some of functions for firm (ex production, accounting). Insourcing : Assigning functions that can be done outside companies to employees.

Factor of Production and meaning

1. Land (natural resources), 2. Labour (workers), 3. Capital (physical assets), 4. Entrepreneurship (who takes risks), 5. Knowledge (determines wants + needs)

Business Environment and 6 elements

Business environment: factors what help or hinder development of business.

1. Legal (restriction, laws placed to conduct activities)

2. Economics (Costs, operations, foreign exchange, presence of entrepreneur, income, currency shift)

3. Technological (Inventions from applied science/engineering, reduce cost + increase efficiency, creative destruction: new innovations rise = old ways disappear, Ecommerce: buying+selling online)

4. Competitive (competition w/other firms, empowerment: front-line responsibility, authority, freedom, responds quickly to concerns, customer driven)

5. Social (demography: statistic study of population, size, gender, characteristics, trends, diversity)

6. Global (world-wide changes, growing sustainability +climate change=reshaping business decisions.

Production (input quantities=output amount produced)

Evolution of Business

Goods: utilities, construction

Manufacturing: Food, machines

Intellectual capital: employee knowledge+skills used to create new products to increase profit

Economic Environment

income, expenditure, resources affects cost of running a business. Productivity, unemployment rates, inflation affects operating business that shapes their choices. Foreign exchange: movement of a country's currency relative to other countries. Degree of entrepreneurship is present.

Resource Allocation

Decisions for distribution of resources

Resource allocation made by?

Individuals: Market (private ownership, market decision-making, Consumer sovereignty: consumer needs affecting production)

Mixed (combines market+command production decision making by private market+government)

Society: Socialist, Command (government decides production+market decisions)

Types of Market Structures

Perfect competition: many small sellers, identical products, no one can set price (e.g., wheat farmers)

Monopolistic competition: many sellers, similar but differentiated products (e.g., restaurants, clothing brands)

Oligopoly: a few large firms dominate, heavy interdependence (e.g., airlines, telecom)

Monopoly: a single seller with no close substitutes (e.g., a local utility)

Types of unemployment

Frictional (between jobs). Cyclical (from economic downturns). Structural (skills no longer needed). Seasonal (weather or time-of-year based).

Business cycle

Expansion — the economy grows: output, jobs, and incomes rise. Demand is strong, businesses invest and hire. This is the "boom" part of the cycle.

Peak — the top of the boom. Growth is at its maximum, but this is the turning point: the economy is overheated and can't keep expanding forever.

Contraction — the economy shrinks: output falls, unemployment rises, spending drops. If it's severe and prolonged, it becomes a recession (or depression).

Trough — the bottom. The decline bottoms out, and the economy is at its lowest point before growth starts again.