Economics
What is Economics?
Studies the flow of resources between different groups of people.
What form of business ownership does this case represent and why?
Doug grew up on a large farm in southwest Wisconsin. As a college graduation gift, Doug’s
father gave him several hundred acres of land to raise organic soybeans, grain, and corn. Doug works the fields by himself, negotiates deals with buyers, repairs equipment, and handles all the accounting and financial issues for the business, which is called The Natural Element.
Sole Proprietor
This department builds finished products for the business.
Production
What is a service based business?
Organization that performs a task in exchange for profit.
What are the economics sectors
Households, firms, government
What is supply and demand?
Supply: amount of a good made available for purchase
Demand: Desire to purchase that good
What form of business ownership does this case represent and why?
Kyle and Palo had been friends for a long time. The friends shared a common interest in
computer technology. Kyle had done some software design and computer work on his own for neighbors and family friends. It wasn’t long before he realized that there was a demand for small businesses to have affordable computer consultants. He decided to start a business. Kyle discussed his venture with Palo and asked him if he would like to combine capital and take an active role in the business with him. Both Kyle and Palo are equally responsible for the businesses’ risks and rewards.
Partnership
This department focuses primarily on promoting the business and its products.
Marketing
Mining, logging, agriculture is an example of this type of business.
Natural Resource
What are the factors of production?
Labour, land, capital, business people
Three types of ecominic systems?
Market, command, mixed
What form of business ownership does this case represent and why?
Rachel worked in one of her family’s two furniture stores. When her grandfather decided to expand the business and build three more stores, Rachel realized that he would need a lot of capital to get the construction started. She suggested that her grandfather raise the money by selling shares of stock in the company to just a few people, not to the general public. He sold 1,000 shares of stock to 100 people and kept 1,500 shares.
Corporation
This department evaluates, acquires, and maintains technology in an organization.
IT or Information Technology
This business transforms natural resources into finished goods for other businesses.
Manufacturing
What is an economic system
Way a society arranges the production distribution and consumption of resources.
If the supply of a product suddenly decreases, what will happen to the demand and price of that good?
Demand= increase
Price= Increase
What is the main advantage of a corporation?
Limited Liability
This department motivates and protects employees within an organization.
HR Human Resources
This type of business sells products directly to consumers.
Merchandise (or Retail)
The economy is in what phase when:
Unemployment is low
Businesses are making lots of products
Consumer spending is high
The gradual increase of prices over a period of time
Inflation
This type of business is:
Expensive to start
Has Lots of support
Products already determined
and limited liability
Franchise
What are the 4 tasks of management
Plan, Organize, Direct, Control
What is a non profit business? (two things)
1) generate a profit
2) provide social service for the community
Why do we study economics?
Need to determine best use of limited resources (resources are scarce)