Economics “The business of America is business” Calvin Coolidge

Retailers are the businesses That sell goods to the consumer of a product

Products are Either goods or services

A Good is A tangible (touchable) item

A Service is a product like Dry cleaning, freight/delivery or car washing

Products, either a Good or Service, must make a profit to stay in business Profit is what is left over after expenses are paid. (Sales minus expenses equals profit)

All start up businesses need a: Mission and a Vision

A Vision is: How you see your business in the future

A Mission is The purpose of your business

A venture is The start of a business concept. A concept is an idea.

Our economic system, in the US, is: The Free enterprise or Capitalistic monetary system

Free enterprise (capitalism) Refers to allowing market forces in an economy without government interference.

This non-interference is also known as: Laissez faire government. Planned economies such as socialist or communist are the opposite of this form of economy.

All economic systems consist of Four Factors of Production

1. Land Land is the natural resources beneath and upon the earth’s surface. Its not just geographic territory, but air, water trees and minerals.

2. Labor This is the human effort needed to produce a product

3. Entrepreneurship Is business ownership. This is the creative people that put all the other factors of production together. In a communistic economic system, this is the government.

4. Capital Consists of equipment, tools, factories, supplies to produce a product and it is the money used to pay expenses.

Scarcity is The fact that wants are always greater than the Factors of Production can provide.

Demand is The amount (quantity) of products that consumers are willing and able to buy.

The economic Law of Demand Contends that as prices go up for a product, the demand for that product goes down.

Supply is The quantity of products producers are willing to produce.

Economic Law of Supply States that as prices are lowered on a product, producers are less willing to produce that product.

The price of a product is, In theory, Equilibrium/Price is where producers are willing to produce a product at a high enough price and consumers are willing and able to purchase a product at a low enough price.