1. Chapter 1
Business Fundamentals

4. Profit Companies
 Profit company- supplies goods/services to
meet customer demands.
 Profit- income left over after all expenses
are paid
 Expenses- money spent in order to run a
business
 Costs- a type of expense that is required
for each stage of production

5. Revenue- the money from selling a
good or service
Profit/Loss Formula:
Revenue-Expenses=Profit
Solvency- a business’s ability to pay
debts.

6. Non-profit Companies
goal is to raise funds for a specific goal/
try to help the good of a community
If there is extra money, it is used to
improve the organization

7. Co-operatives
an independent association of persons
who come together to meet their
economic, social and cultural
needs/goals.
Democratically run

8. Other ways to classify
businesses
Size- small or medium sized businesses
employ fewer than 500 people.
Type of ownership
Goods/services provided
Channels of distribution (how it delivers
goods/services to customers – online,
catalogues, stores etc..
Role in the community it plays
Jobs the business provides

9. The Role of the Consumer
Producers-make goods or provide services
Consumers-people who buy goods/services
Marketplace-any location where producers
and consumers come together to buy/sell
Consumers influence products made example:
________________ and
price example:________________ and
service example:__________________.

10. Starting A Business
Someone who starts their own business
is called an entrepreneur
Characteristics of entrepreneurs:
 ____________, _____________,
____________ and _____________.

11. Consumer Needs & Wants
Entrepreneurs try to assess if there is
an unmet need or want in the market.
Examples of needs:
Examples of wants:

12. Decision Making Model
1) Determine what decision ahs to be
made
2) Identify the alternatives
3) Evaluate the advantages and
disadvantage of each alternative.
4) Make a decision and take action
5) Evaluate the decision

13. Economic Resources
Also known as factors of production-
things needed to make goods or
services
 1) Natural Resources ex: ______________
 2) Human Resources ex: ______________
 3) Capital Resources ex: ______________

14. Economic Systems
Econ. Systems must answer 3 big
questions
 1) what goods/services should be
produced?
 2) for whom should they be produced?
 3) how should we produce them?

15. Demand, Supply & Price
Law Of Demand
 Demand- the quantity of a good/service
that consumers are willing and able to buy
at a particular price.
 Law of demand states- as the price
increases, consumers buy less.

16. Conditions that affect demand
Changing consumer income
 Example:___________________
Changing consumer taste
 Example: ___________________
Changing expectations
 Example: __________________
Changing population
 Example:_________________

17. Law of Supply- quantity of a
good/service that businesses are
willing/able to provide within a range or
prices.
Law states that as price increases
businesses will be able to sell more.

18. Conditions that affect supply
Change in number of suppliers
 Example:_________________
Changes in price
 Example: _______________
Changes in technology
 Example: _______________
Changing expectations for future price
 Example: _______________
Changing production costs
 Example: ______________