1.1 - Intro to business and economics

Business - all activities involved in developing and exchanging products
Product - anything that can be brought or sold: includes goods and services

  • good - a physical item that can be touched

  • service - an action or task that is performed, usually for a fee

Customers - an individual or group who buys products; referred to as a client in a service business

customers who purchase goods and services for their own use are consumers.

  • consumer market - customers buy for own use

  • business market - customers buy for their business

Impact of business

A. business provides impact

  • products provided to meet a person must have in order to survive

    • Need - something a person must have in order to survive

    • want - something a person desires but can live without

  • Utility described the characteristics of that product that satisfy wants and needs.

    • form - change product form to be more useful

    • place - product available at a more convenient location

    • time - make products available at times customers want or need them

    • information - make product facts and details available to customers

    • Possession - make the product easier for customers to buy

B. Business creates markets

  • Market - anywhere buyers and sellers meet to buy and sell goods and services

    • also known as a marketplace

    • market not necessarily a physical location


C. Business Generate Economic Benefit

  • Businesses operate to earn Profit (the difference b/w the income earned and expenses incurred by a business during a specific period of time)

  • 1. Employing workers provide wages (money earned in exchange for work)

    • Business creates products for consumers to determine their Standard of living (level of material comforts, measured by goods, services, and luxuries available)

  • 2. Business profits are taxed by local, state, and federal governments which pay for services that benefit the community.

Functions of Business

  • Production - activity related to making a product such as farming, mining, Construction and manufacturing

  • finance: activities involving money such as receiving money from customers or paying money to suppliers and paying wages to employees

  • marketing - activities that identify, anticipate, and satisfy a customer demand while making a profit

  • management- controlling and making decisions about a business including planning, coordinating, monitoring business activity and hiring/training employees