Module 1 - BUS 110

3 questions economists address

(1) What goods and services should be produced to meet consumer needs? (2) How should they be produced, and who should produce them? (3) Who should receive goods and services? The answers to these questions depend on a country's economic system

Legal Monopoly

A legal monopoly arises when a company receives a patent giving it exclusive use of an invented product or process for a limited time, generally twenty years.

To get a sense of where the economy is headed in the future.

Economic Indicators

Manager

Involves planning for, organizing, staffing, directing, and controlling a company's resources so that it can achieve its goals. Responsible for: plan by setting goals and developing strategies for achieving them. Organize activities and resources to ensure that company goals are met. Staff the organization with qualified employees and direct them to accomplish organizational goals. Designing controls for assessing the success of plans.

The five functions needed to run a business

Management: involves planning, organizing, staffing, directing, and controlling resources to achieve organizational goals. Operations: transforms resources (labor, materials, money, and so on) into products. Marketing: works to identify and satisfy customers' needs. Finance: involves planning for, obtaining, and managing company funds. Accounting: entails measuring, summarizing, and communicating financial and managerial information. EXERCISES

Operation Manager

The person who designs and oversees the transformation of resources into goods or services. Also responsible for ensuring that products are of high quality.

Oligopoly Competition

a few sellers supply a sizable portion of products in the market. They exert some control over price, but because their products are similar, when one company lowers prices, the others follow.

Free market system (Capitalism)

business is conducted with only limited government involvement. Competition determines what goods and services are produced, how they are produced, and for whom.

Marketing

consists of everything that a company does to identify customers' needs and designs products to meet those needs. Marketers develop the benefits and features of products, including price and quality. They also decide on the best method of delivering products and the best means of promoting them to attract and keep customers.

Non-profit

established to provide social or educational services

GDP

he market value of all goods and services produced by the economy in a given year.

Natural Monopoly

include public utilities, such as electricity and gas suppliers. They inhibit competition, but they're legal because they're important to society.

Finance

involves planning for, obtaining, and managing a company's funds

Business

is an organized effort of individuals to produce and sell, goods and/or services that satisfy needs of society at a profit.

Demand

is the quantity of a product that buyers are willing to purchase at various prices.

Supply

is the quantity of a product that sellers are willing to sell at various prices.

Economics

is the study of how things of value or wealth is created and distributed

Report the status of the economy a few months in the past

lagging economic indicators

that predict the status of the economy three to twelve months in the future

leading economic inidcator

Monopolistic Competition

many sellers offer differentiated products—products that differ slightly but serve similar purposes. By making consumers aware of product differences, sellers exert some control over price.

Perfect compition

many small companies sell identical products. Because no company is large enough to control price, each simply accepts the market price. The price is determined by supply and demand.

Accounting

measure, summarize, and communicate financial and managerial information and advise other managers on financial matters.

CPI Consumer Price INdex

measures inflation by determining the change in prices of a hypothetical basket of goods bought by a typical household.

Four types of competition

perfect competition, monopolistic competition, oligopoly, and monopoly.

Financial Accountants

prepare financial statements to help users, both inside and outside the organization, assess the financial strength of the company

Managerial Accountants

prepare information, such as reports on the cost of materials used in the production process, for internal use only.

Planned system (communism and socialism)

the government exerts control over the production and distribution of all or some goods and services.

Equilibrium Price

the price at which buyers are willing to buy the same amount that sellers are willing to sell.

Monopoly Competition

there is only one seller in the market. The market could be a geographical area, such as a city or a regional area, and does not necessarily have to be an entire country. The single seller is able to control prices. Most monopolies fall into one of two categories: natural and legal.

Monetary Policy

used to control the money supply and interest rates.

Fiscal Policy

uses the government's power to spend and tax.