Joey and Jason plan to open a music store targeting retirees by selling rap CDs. Businesses contribute to society through job creation and tax revenue. Barriers to entry refer to obstacles that make it difficult for new competitors to enter an industry. Goods industries typically face higher barriers due to costs of factories and equipment. Lowering prices may occur in a recession to stimulate demand. A free market economy relies on supply and demand with minimal government intervention, while a planned economy involves more government control over production and resource allocation.

1. Intro to Business Exercise 1.0
1. Joey and Jason have recently obtained a license to set up business. They are
free to set up any business of their choice. In the end, they have decided to
target a large retiree community and open a music store selling Rap CDs (e.g.
Eminem, Snoop Dog). Comment on their decision.
2. Businesses are good for the society. Discuss how they can contribute. Provide
two (2) specific examples for each type of contribution.
3. Define the term “barrier to entry”. Which type of business (goods-producing or
service) has bigger barriers to entry? Why?
4. List two (2) types of barriers to entry and give one example for each type.
5. In which economic condition should a business lower the price of its product
and services? Why?
6. Explain what a free market or capitalistic economy means? And a planned
economy?