1) Business involves the production and exchange of goods and services for profit. It can be categorized as industry, which produces goods and services, or commerce, which facilitates the flow of goods and services between producers and consumers. 2) A business's environment includes internal factors under its control as well as external macro factors like political, legal, economic, social, technological, and environmental conditions that influence its operations. 3) The political and legal environment establishes rules and regulations that govern business, like general laws, financial laws, labor laws, and taxation laws.