BA 101 Introduction to Business 1. Fundamentals of Business and Economics

What is a Business? Knowledge EntrepreneursFor-ProfitFor-Profit Goods Goods Services Services Job creation Job creation Tax-base Tax-base Investments Investments Goods Goods Services Services Job creation Job creation Tax-base Tax-base Investments InvestmentsNon-ProfitNon-Profit Education Education Libraries Libraries Museums Museums Social services Social services Charities Charities Education Education Libraries Libraries Museums Museums Social services Social services Charities Charities Resources Capital

Categories of Business Providing Services Producing Goods Capital IntensiveLabor Intensive

Service Sector Growth More disposable income More disposable income Lifestyle and demographic changes Lifestyle and demographic changes Complex goods and technologies Complex goods and technologies Need for professional advice Need for professional advice Low barriers to entry Low barriers to entry

What is Economics? Microeconomics Macroeconomics Economic System

Factors of Production Resources Capital Entrepreneurs Knowledge

Economic Systems Capitalism Mixed Capitalism SocialismCommunism Privatization Free-Market System Planned System

Microeconomics The Forces of Supply and Demand

Supply and Demand Supply: Specific quantity of a product that the seller is able and willing to provide Demand: Buyers’ willingness and ability to purchase products

Advertising and Promotion Spending Advertising and Promotion Spending Consumer Income Consumer Preferences Price of Substitute Products Price of Substitute Products Price of Complementary Goods Price of Complementary Goods Expectations About Future Prices Expectations About Future Prices Price Higher Lower Demand Lower Higher Understanding Demand

Understanding Supply Goods and Services Supply Price Variables Higher MoreLess Lower

The Relationship between Supply and Demand Variables that affect supply and demand change simultaneously and continually, thus creating changes in the equilibrium price. Both production levels and prices reflect the interaction of supply and demand.

Macroeconomics Issues for the Entire Economy

PureCompetition MonopolisticCompetitionOligopoly Monopoly Free-Market Competition

Price Speed Quality Service Innovation Competitive Advantage

The Role of Government Fostering competition Fostering competition Regulating industries Regulating industries Deregulating industries Deregulating industries Protecting stakeholders’ rights Protecting stakeholders’ rights Contributing to economic stability Contributing to economic stability

Fostering Competition Antitrust Legislation Mergers and Acquisitions

Regulating and Deregulating Industries GovernmentRegulationFreeCompetition Fair Competition Business Ethics Working Conditions Public Safety

Contributing to Economic Stability EconomicExpansion EconomicContraction Recovery Recession BusinessCycleBusinessCycleMonetaryPolicyFiscalPolicy InterestRates Revenue and Spending

Major Economic Indicators Housing Starts Durable-GoodsOrders Interest Rates UnemploymentStatistics

Measuring Price ChangesInflationDeflation Consumer Price Consumer Price Index (CPI) Index (CPI) Purchasing Power

Measuring National Output Gross National Gross National Product (GNP) Product (GNP) Gross Domestic Gross Domestic Product (GDP) Product (GDP) Dollar Value YesYes Final Goods and Services YesYes Domestic Businesses NoYesForeign-OwnedBusinesses YesNo Overseas Operations

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

What does the future hold? The aspect of terrorism China in the global economy Work mobility Deficits in budget and balance of trade E-business

Challenges of Globalization Quality products and services Quality products and services Changing needs of customers Changing needs of customers Managing a small business Managing a small business Globalization and workforce diversity Globalization and workforce diversity Ethics and social responsibility Ethics and social responsibility Technology and electronic commerce Technology and electronic commerce