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Principles of Business, Marketing, and Finance

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Presentation on theme: "Principles of Business, Marketing, and Finance"— Presentation transcript:

1 Principles of Business, Marketing, and Finance
Producers in a Private Enterprise System Copyright © Texas Education Agency, All rights reserved

2 Copyright © Texas Education Agency, 2011. All rights reserved
Basic Economic Problem Scarcity Unlimited wants and needs Limited resources Choices must be made Explain how all individuals and societies face scarcity. The free enterprise system must make decisions about what will be produced with limited resources. Copyright © Texas Education Agency, All rights reserved

3 Questions Economies Must Answer
What goods and services will be produced? How will they be produced? For whom will they be produced? Copyright © Texas Education Agency, All rights reserved

4 Copyright © Texas Education Agency, 2011. All rights reserved
Economic Systems Controlled Economy Mixed Economy Market Economy Controlled economy-government answers the three economic questions. Free economy (market economy)-resources are owned by individuals rather than the government. Mixed economy-decisions are made independently with no attempt at government regulation or control Copyright © Texas Education Agency, All rights reserved

5 America’s Private Enterprise System
Based on independent decisions by businesses and consumers with only a limited government role regulating those relationships Copyright © Texas Education Agency, All rights reserved

6 America’s Private Enterprise System
Characteristics of Private Enterprise resources of production are owned and controlled by individual producers Producers use the profit motive to decide what to produce-use of resources to obtain the greatest profit Individual consumers make decisions about what will be purchased to satisfy needs Consumers use value in deciding what to consume Government stays out of exchange activities between producers and consumers unless it is clear that individuals or society are harmed by the decision Producers must listen to consumer demands to stay in business. The free enterprise system does not want a lot of government involvement. Copyright © Texas Education Agency, All rights reserved

7 Copyright © Texas Education Agency, 2011. All rights reserved
Consumers Explain how consumers and their buying behavior decide what is produced in a free enterprise system. Individuals who purchase products and services to satisfy needs Copyright © Texas Education Agency, All rights reserved

8 Copyright © Texas Education Agency, 2011. All rights reserved
Demand a relationship between the quantity of a product consumers are willing and able to purchase and the price Copyright © Texas Education Agency, All rights reserved

9 Copyright © Texas Education Agency, 2011. All rights reserved
Producers businesses that use their resources to develop products and services to consumers for profit Supply-relationship between the quantity of a product that producers are willing and able to provide and the price Determine the needs and demands of consumers Producers must decide how they will use their limited resources. A farmer must determine which crops to grow, car manufacturers must determine the quantity of different types of automobiles to produce. Copyright © Texas Education Agency, All rights reserved

10 Copyright © Texas Education Agency, 2011. All rights reserved
Government least amount of involvement in free enterprise system some regulations use taxes for services Copyright © Texas Education Agency, All rights reserved

11 Business Customer Classifications
Producers-1.2 million businesses farms and ranches mining companies oil refineries manufacturers of business and consumer products construction-largest production category-over 700,000 companies small-less than $10,000 a year on purchases large-employ several hundred thousand people worldwide and may easily spend $10 million in one day on purchases Copyright © Texas Education Agency, All rights reserved

12 Copyright © Texas Education Agency, 2011. All rights reserved
Business Customer Classifications Resellers Service Businesses Government Non-Profit Organizations Resellers-wholesale and retail businesses who connect producers with consumers. Service Businesses-growing faster than any category of business in the U.S. Government-federal, state and local government agencies provide services to citizens and develop and enforce laws and regulations. Nonprofit Organizations-serve the community with no profit motive. Copyright © Texas Education Agency, All rights reserved

13 Copyright © Texas Education Agency, 2011. All rights reserved
Forms of Production Extraction and cultivation -products are obtained from nature or grown using natural resources Processing -changing and improving the form of another product Manufacturing -combines raw materials and processed goods into finished product Ask students to give examples of producer involved with extraction and cultivation.  Ask students what processes are required to produce a pair of cotton jeans. Explain the variety of producers used in the process. Explain how large home builders construct tract homes which use a mass production concept and how custom builders design a different home for each customer. Then explain why the custom process is more expensive than the mass production process. Copyright © Texas Education Agency, All rights reserved

14 Manufacturing Process
Several manufacturers are part of the total activity needed to produce goods that are purchased by consumers or other businesses. Copyright © Texas Education Agency, All rights reserved

15 Types of Manufacturing Procedures
Mass Production -assembly process that makes a large number of identical products using a continuous, efficient procedure Ex: Cars Custom Manufacturing -building a specific and unique product to meet the needs of one customer Ex: Nike ID Shoes Materials Processing -changing the form of raw materials so they can be consumed or used to make other products Ex: Finished Steel Copyright © Texas Education Agency, All rights reserved

16 Copyright © Texas Education Agency, 2011. All rights reserved
Where Was It Produced? Select an finished product of your choice and produce a PowerPoint explaining the production of that item. It must include: The name of the product, the company that produces it and where company is located. Research to determine the major raw materials and natural resources that are used in the production of the product. The country or countries that are the major sources of the production or supply of those materials. Copyright © Texas Education Agency, All rights reserved


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