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- 1. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 1 Fundamentals of Business and Economics
- 2. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 2 Why Study Business? Learn what it takes to run a business Build your business vocabulary Develop your workplace skills Learn about a various occupations Appreciate today’s business careers
- 3. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 3 What is a Business? Knowledge Entrepreneurs For-Profit • Goods • Services • Job creation • Tax-base • Investments Non-Profit • Education • Libraries • Museums • Social services • Charities Resources Capital
- 4. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 4 Categories of Business Providing Services Producing Goods Capital Intensive Labor Intensive
- 5. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 5 Service Sector Growth • More disposable income • Lifestyle and demographic changes • Complex goods and technologies • Need for professional advice • Low barriers to entry
- 6. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 6 What is Economics? Microeconomics Macroeconomics Economic System
- 7. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 7 Factors of Production Resources Capital Entrepreneurs Knowledge
- 8. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 8 Economic Systems Capitalism Mixed Capitalism Socialism Communism Privatization Free-Market System Planned System
- 9. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 9 Microeconomics The Forces of Supply and Demand
- 10. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 10 Advertising and Promotion Spending Consumer Income Consumer Preferences Price of Substitute Products Price of Complementary Goods Expectations About Future Prices Price Higher Lower Demand Lower Higher Understanding Demand
- 11. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 11 Demand Curve for Airline Tickets
- 12. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 12 Expected Shifts in Demand Curve Consumer Income Consumer Preferences Price of Substitutes Price of Complementary Goods Advertising-Promotion Consumer Expectations Number of Buyers Variable Shifts Right When: Increases More Favorable Increases Decreases Increases Optimistic Increases Shifts Left When: Decreases Less Favorable Decreases Increases Decreases Pessimistic Decreases
- 13. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 13 Demand Curve for Airline Tickets
- 14. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 14 Understanding Supply Goods and Services Supply Price Variables Variables Higher More Less Lower
- 15. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 15 Supply Curve for Airline Tickets
- 16. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 16 Expected Shifts in Supply Curve Costs of Inputs Number of Competitors New Technology Suppliers Expect That Future Sales Prices Variable Shifts Right When: Decreases Decreases Decreases Production Costs Will Decline Shifts Left When: Increases Increases Increases Production Costs Will Increase
- 17. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 17 Supply Curve for Airline Tickets
- 18. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 18 How Demand and Supply Interact click above title for web link
- 19. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 19 Macroeconomics Issues for the Entire Economy
- 20. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 20 Pure Competition Monopolistic Competition Oligopoly Monopoly Free-Market Competition
- 21. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 21 • Price • Speed • Quality • Service • Innovation Competitive Advantage
- 22. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 22 The Role of Government • Fostering competition • Regulating industries • Deregulating industries • Protecting stakeholders’ rights • Contributing to economic stability
- 23. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 23 Fostering Competition Antitrust Legislation Mergers and Acquisitions
- 24. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 24 Regulating and Deregulating Industries Government Regulation Free Competition Fair Competition Business Ethics Working Conditions Public Safety
- 25. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 25 Protecting Stakeholders Agency or Commission Areas of Responsibility Consumer Product Safety Commission (CPSC) Environmental Protection Agency (EPA) Equal Employment Opportunity Commission (EEOC) Federal Communications Commission (FCC) Federal Energy Regulatory Commission (FERC) •Safety of consumer products •Environmental protection •Employment discrimination • Telephone, telegraph, radio, television •Commercial airline industry •Electric power and natural gas Federal Aviation Administration (FAA)
- 26. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 26 Protecting Stakeholders Agency or Commission Areas of Responsibility Federal Highway Administration (FHA) Federal Trade Commission (FTC) Food and Drug Administration (FDA) Interstate Commerce Commission (ICC) Securities and Exchange Commission (SEC) •Vehicle safety requirements •Business practices and advertising •Foods, drugs, medical devices, cosmetics • Interstate transportation •Safety and health of workers •Investors and securities markets Occupational Safety and Health Administration (OSHA)
- 27. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 27 Contributing to Economic Stability Economic Expansion Economic Contraction Recovery Recession Business Cycle Business Cycle Monetary Policy Fiscal Policy Interest Rates Revenue and Spending
- 28. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 28 Major Economic Indicators Housing Starts Durable-Goods Orders Interest Rates Unemployment Statistics
- 29. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 29 Measuring Price Changes Inflation Deflation Consumer Price Index (CPI) Purchasing Power
- 30. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 30 Measuring National Output Gross National Product (GNP) Gross Domestic Product (GDP) Dollar Value Yes Yes Final Goods and Services Yes Yes Domestic Businesses No Yes Foreign-Owned Businesses Yes No Overseas Operations
- 31. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 31 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
- 32. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 32 U.S. Economic Growth • Age of Industrialization (1900-1944) • Postwar Golden Era (1945-1969) • Turbulent Years (1970-1979) • Rise of Global Competition (1980-1989) • New Economy and Beyond (1990 to Today)
- 33. © Prentice Hall, 2007 Excellence in Business, 3e Chapter 1 - 33 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