Bottom Line- We all Need/Want $$$ The profit motive acts as an incentive for people

to produce and sell goods and services. Do you agree with this statement? Why or why

not? Why do people start their own businesses? What are some of the costs and benefits

involved with the decision of starting a business?

Governments and institutions help participants in a market economy accomplish their financial goals.

Entrepreneurs

People who take the risk of starting a business.

Name 5 Entrepreneurs who Name 5 Entrepreneurs who you consider to be successful. you consider to be successful.

Come up with a list of traits Come up with a list of traits that these people share. that these people share.

Costs, Revenue & Profitsp. 132-137

Terms to Know Break Even Point

Fixed Costs- costs incurred even when there is no activity.

Example- rent & equipment

Variable costs- costs incurred with each product produced.

Example- ingredients, labor

Total Costs= FC + VC

Production Cost Simulation

Cookie Recipe Break Even Point

How many batches until you reach the break-even point?

How many batches until you make a profit?

Cookie Start Up

Complete the cookie start up worksheet.

Types of Businessesp. 61-69

Sole Proprietorship-owned and operated by one person…70% of businesses

Pros: easy to start up; few restrictions; full decision making power

Cons: full liability; Limited growth; limited life

Types of Businesses

Partnership-owned by 2 or more co-owners

Pros: easy start up; few restrictions; specialization; individual taxes; more capital

Cons- greater liability; conflict with partner; temporary

Types of Businesses

Corporations-raised with venture capital through share holders

Privately held vs. Publically held

Pros- Limited liability for owner; lots of capital; professional management (CEO) Long life

Cons- complex; loss of control; more government regulation; double taxation

Other Types of Organization Franchise

parent company sells the rights to open branches to private individuals

Non Profit Does not

make a profit

Exempt from taxes

Works for a social purpose

Cooperative Owned and

operated by a group…usually the workers.

Run democratically

Sweet Opportunities

With your group come to a decision about which business structure each

of the four would-be entrepreneurs should

set up.

(hint: cost-benefit analysis)

Basketball Game Analysis

The Production Function p.127-130

Terms to Know

Stages

Production Function- shows how total output changes when a single variable changes

Usually applies to hiring workers.

Stage 1- Increasing Marginal Returns- each worker hired contributescontributes moremore to the Total Output than the one before.

Stage 2- Diminishing Marginal Returns- each worker hired contributes less to the Total Output than the one before.

Stage 3- Negative Marginal Returns- too many workers causes total production to fall.

You didn’t Build That…

You Didn’t Build That…

You Didn’t Build That?

What was Mitt Romney’s Response to Obama’s remark “you didn’t build that”?

What was Barak Obama’s Message?

Use economics to analyze the two views? Which one is most realistic?

Responsibilities of Businesses Hire and fire employees Screen employees Compensated for property Keep intellectual property Paying taxes Deal honestly Honor Contracts Practice Equal Opportunity Ensure public safety

Ethical Responsibilities

Do businesses have a responsibility to “give something back” to the community?

Are jobs enough?

Government’s Role

Create and Enforce safety standards

Protect the consumers from fraud

Prevent (or minimizes) Market Failure

Provide for the poor and powerless

Increase efficiency in the market

Defend our economic interests

Maintain fair trade Establish a system of

justice Collect Taxes

Business Plan Get into your teams and brainstorm ideas for

your business. If you don’t already have a business get a few

partners and brainstorm a list of skills that you as a group possess. Turn those ideas into possible businesses. What are the needs we have as a class?

If you already have a business: How are things going? Have you made any Jo? Make a list of suggestions for improving your business. Would an Advertisement help you?

Make a chart of pluses and minuses.

Business Plan

Don’t forget to discuss the availability of resources, potential profit, special challenges, possible help you could use, and how each of the elements of business operation will be addresses.

Your goal by the end of today's class is to generate a list of possible services/businesses and ways to implement them.