The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ......
Transcript of The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ......
![Page 1: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/1.jpg)
11 The Scope of Business
![Page 2: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/2.jpg)
2
What Is Business?
An organization that provides goods and/or services to earn profits
Profits:The positive difference between revenues and expenses
![Page 3: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/3.jpg)
3
The Nature of Business
To earn profits by providing products:
Tangible
Cars, food, clothing
Intangible
A service
An idea
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
Go to16
![Page 4: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/4.jpg)
4
Business vs. NonprofitOrganization
Nonprofit Organization
Provides products, especially services, for some purpose other than profits, ex. The Salvation Army, 4300 American colleges & universities.
Business
An individual or organization that tries to earn a profit by providing products that satisfy people’s needs, ex. IBM, Coca-Cola.
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 5: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/5.jpg)
5
The Goals of Business
For-Profit 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.
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 6: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/6.jpg)
6
Overview of the Business World
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 7: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/7.jpg)
7
The People andActivities of Business
Activities:
Management
Marketing
Finance
People:
Owners
Employees
Customers
Other stakeholders:
Investors
Regulatory Agencies
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 8: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/8.jpg)
9
Why Study Business?
To develop skills and acquire knowledge to prepare for your future career
To help you better understand the many business activities that are necessary to provide satisfying goods and services
To help you become a well-informed consumer and member of society
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 9: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/9.jpg)
11
Physical
Resources
Labor Capital
Entrepreneurs
Factors of Production
Information
Resources
Go to16
![Page 10: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/10.jpg)
12
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
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 11: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/11.jpg)
13
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
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 12: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/12.jpg)
14
What is anEconomic System?
A nation’s system for allocating resources among citizens.
Assumes resources are scarce thus requiring allocation.
Market is mechanism for exchange between Buyer/Seller
![Page 13: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/13.jpg)
15
Types ofEconomic Systems
Communism Socialism(Mixed Market)
Planned Economies
Capitalism vs. Market
![Page 14: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/14.jpg)
16
Circular Flow of Economics
Output(Goods & Services)
Input(Factors of Production)
![Page 15: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/15.jpg)
17
Basic Questions to Be Asked of Economic Systems
1. What goods and services and what quantity will satisfy the needs of the consumer?
2. How will the goods and services be produced?
a. Who will produce them and with what resources?
3. How are the goods and services to be distributed to the consumer?
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 16: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/16.jpg)
18
How Are Factors of Production Allocated?
Planned Economy:
An economic system in which the government owns and operates all sources of production
Market Economy:
An economic system in which buyers and sellers interact based on freedom of choice
![Page 17: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/17.jpg)
19
Types of Economic Systems
Capitalism
Communism
Socialism
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 18: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/18.jpg)
20
Capitalism:A Fundamentally Market-Based Economy
Individuals Choose:
Where to work
What to buy
How much to pay
Producers Choose:
Who to hire
What to produce
How much to charge
Government supports private ownership
and encourages entrepreneurship
![Page 19: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/19.jpg)
21
Capitalism
Private Ownership of
Factors of Production
Economic Decisions
Made by Owners
Freedom of Decisions/Choices
![Page 20: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/20.jpg)
22
Mixed Economies: Planned and Market
The economies of most countries include both planned and market elements.
Worldwide trend is toward more market elements.
![Page 21: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/21.jpg)
23
Communism
Planned Economic System
Government Owns All Production Facilities All Citizens Are Employees of Government All Capital
All Economic Decisions Controlled By Government
![Page 22: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/22.jpg)
24
Mixed Market Economies
“Pure” Planned
“Pure” Market
![Page 23: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/23.jpg)
25
Socialism: Mixed Economy
Socialism
A planned economic system in which the government owns and operates selected sources of production
Privatization:
The process of converting government enterprises into privately owned companies
![Page 24: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/24.jpg)
26
Privatization vs. Socialism
Privatization
Socialism
![Page 25: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/25.jpg)
27
Comparison of Communism, Socialism, and Capitalism
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 26: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/26.jpg)
28
Economic Systems and Where They Occur
Communism Socialism Capitalism
China Sweden United States
North Korea India Canada
Cuba Israel Japan
Australia
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 27: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/27.jpg)
29
Mixed Economies
Most countries of the world have elements of more than one economic system.
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 28: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/28.jpg)
30
Supply & Demand
Demand- Comes From Buyers As Price Drops Buyers Purchase More
Supply- Producers’ Willingness As Price Increase Producers Offer More
Buyers & Suppliers Work Towards Equilibrium = Profit Maximization Surplus vs. Shortage
![Page 29: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/29.jpg)
31
Supply and Demand Drive the U.S. Economic System
Supply:
The willingness and ability of producers to offer a good or service for sale
Law of Supply:
Producers will supply (offer) more of a product for sale as its price rises and less as its price drops.
![Page 30: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/30.jpg)
32
Supply and Demand Drive the U.S. Economic System (cont’d)
Demand:
The willingness and ability of buyers to purchase a good or service
Law of Demand:
Buyers will demand (purchase) more of a product as its price drops and less as its price increases.
![Page 31: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/31.jpg)
33
U.S. Hot Dog Consumption
Hot dogs consumed between Memorial Day & Labor:
7 billion
Average number of hot dogs eaten/person from Memorial Day to Labor Day:
24
Rate of consumption during this time:
818 hot dogs/secondSource: National Hot Dog and Sausage Council, as reported in American Demographics, July/August 2004, p. 48.
![Page 32: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/32.jpg)
34
Demand and Supply SchedulesQuantity of Quantity of
Price Pizzas Demanded Pizzas Supplied
$2 2000 100
$4 1900 400
$6 1600 600
$8 1200 800
$10 1000 1000
$12 800 1200
$14 600 1300
$16 400 1600
$18 200 1800
$20 100 2000
![Page 33: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/33.jpg)
35
Pizza Supply At Given Price
0
5
10
15
20
25
100 400 600 800 1000 1200 1300 1600 1800 2000
Quantity (S)
Pri
ce o
f P
izza
SHigh
HighLow
![Page 34: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/34.jpg)
36
Pizza Demand At Given Price
0
500
1000
1500
2000
2500
2 4 6 8 10 12 14 16 18 20
Quantity Demanded (D)
Piz
za P
rice
High
HighLow
D
![Page 35: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/35.jpg)
37
Equilibrium (Market Price)
0
500
1000
1500
2000
2500
2 4 6 8 10 12 14 16 18 20
Quantity
Piz
za P
rice
High
HighLow
SD
Market Equilibrium
Surplus
Shortage
![Page 36: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/36.jpg)
38
The Forces of Supply and Demand
Supply The number of products
that businesses are willing to sell at different prices at a specific time
Consumers are usually willing to buy more of an item as its price falls because they want to save money.
Demand The number of goods
and services that consumers are willing to buy at different prices at a specific time.
Businesses are willing to supply more of a good or service at higher prices because the potential for profits is higher.
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 37: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/37.jpg)
39
The U.S. Economy is a Private Enterprise System
Individuals are free to pursue their own interests without government restriction.
Four Key Elements:
Private Property Rights
Freedom of Choice
Profits
Competition
![Page 38: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/38.jpg)
40
The Free-Enterprise System
Individuals must have the right to own property and pass it on to their heirs.
People and businesses must have the right to earn profits and use them as they wish.
Individuals and businesses must have the right to determine how their businesses operate.
Individuals must have the right to choose their career, where to live, and what to buy.
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 39: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/39.jpg)
41
Competition
Competition motivates businesses to produce their products better or cheaper
![Page 40: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/40.jpg)
42
The Nature of CompetitionFour Competitive Environments
Pure Competition Many small businesses sell one standardized product.
Monopolistic Competition
There are fewer businesses than in a pure competition system, and the differences between the goods they sell are small.
Oligopoly Very few businesses sell a product; each business supplies a large portion of the products sold in the marketplace.
Monopoly There is only one producer of a product in a given market.
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 41: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/41.jpg)
43
Private Enterprise
Private Property
Freedom of Choice
Profits
Competition
![Page 42: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/42.jpg)
44
Degrees of Competition
Sellers
One Many
Monopoly
Oligopoly
Perfect Competition
Monopolistic Competition
![Page 43: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/43.jpg)
45
Perfect/Pure Competition
Competition- 2+ Businesses Vie For Same Resources/Customers
Condition- No Single Firm Dominant
Principles Buyers View Products As Similar
Buyers/Sellers Know Each Others’ Prices/Costs
Easy To Enter/Leave Marketplace
Prices Set By Supply/Demand & Accepted by Sellers/Buyers
![Page 44: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/44.jpg)
46
Monopolistic Competition
Many Buyers
Fewer Sellers Than Perfect/Pure Competition
Buyer Perception of Product/Brand Differentiation
![Page 45: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/45.jpg)
47
Oligopoly Few Large Sellers
Market Entry Difficult- High Capital Investment
Sellers Control Strategies
![Page 46: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/46.jpg)
48
Monopoly
Characteristics Only One Producer
Controls Industry Pricing
Natural Monopoly One Producer
Can Efficiently Supply All Goods/Services
![Page 47: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/47.jpg)
49
Economic Cycles and Productivity
Economic expansion occurs when an economy is growing and people are spending more money.
Economic contraction occurs when spending declines.
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 48: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/48.jpg)
50
Measuring the Economy
One commonly used measure is gross domestic product.
GDP is the sum of all goods and services produced by a national economy in a country during a year.
GNP is is the sum of all goods and services produced by a national economy regardless of where the factor of production are located during a year
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 49: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/49.jpg)
51
Overall Unemployment Rate in the U.S. Civilian Labor Force
Source: “Overall Unemployment Rate in the Civilian Labor Force, 1920–2002,” InfoPlease (n.d.), www.infoplease.com/ipa/
A0104719.html (accessed February 16, 2004).
![Page 50: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/50.jpg)
52
Growth in U.S. GrossDomestic Product Dollars
Source: “Gross Domestic Product or Expenditure, 1930–2002,” InfoPlease (n.d.), www.infoplease.com/ipa/
A0104575.html (accessed February 16, 2004). 8000 10000
![Page 51: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/51.jpg)
53
Growth of The American Economy
The Early Economy Primarily agricultural; the use of natural resources
The Industrial Revolution The development of new technology and factories
The Manufacturing and Marketing Economies Devoted to manufacturing goods and providing services
rather than producing agricultural products
The Service and Internet-based Economy Devoted to the production of services that make life easier
for busy consumers
Did You Know? 60 percent of adult women work.
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 52: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/52.jpg)
54
PRODUCTIVITY
is impacted by:
National
Debt
Understanding Economic Performance
KEY CONCEPTS
Productivity:
The amount a system produces compared to the resources needed to produce it
Balance
of Trade
![Page 53: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/53.jpg)
55
Economic Stability:Balanced Growth of Money and Goods
Two related factors threaten stability:
INFLATION
UNEMPLOYMENT
![Page 54: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/54.jpg)
56
The Role of the Entrepreneur
An entrepreneur is an individual who risks his or her wealth, time, and effort to develop for profit an innovative product or way of doing something.
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 55: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/55.jpg)
57
The Role of Government in the American Economy
Federal, state, and local governments intervene in the economy with laws and regulations designed to:
Promote competition
Protect consumers, employees, and the environment
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
![Page 56: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/56.jpg)
58
Recessions and Depressions
Recession:
Aggregate output declines, unemployment increases
Depression:
Severe and long-lasting recession
![Page 57: The Scope of Business - · PDF file01/08/2014 · 1 The Scope of Business 1. 2 ... The Industrial Revolution ... The Manufacturing and Marketing Economies](https://reader033.fdocuments.in/reader033/viewer/2022052710/5aa614277f8b9ae7438e5b50/html5/thumbnails/57.jpg)
59
Satu