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.
