Physical/mental abilities used by people to produce goods and services
funds necessary to acquire needed natural and human resources.
Questions for economic systems
1. What goods and services and what quantity will satisfy the needs of the customer?
2. How will the goods and services be produced?
3. How are goods and services to be distributed to the consumer?
Types of Economic systems
Role of entrepreneur
An individual who risks his/her wealth,time,and effort to develop for profit an innotative product or way of doing something.
Role of government
federal,state,and local governments intervene in the economy with laws and regulations designed to promote competition, protect consumers,employees, and the environment.
the number pf products that businesses are willing to sell at different prices at a specific time;consumer ususally buy more of the product when the price falls
The number of goods and services that consumers are willing to buy at different prices at a specific time;businesses are usully willing to supply more of a good at higher prices because the potential profits are higher.
the principles and standards that define acceptable conduct in business.
A business's obligation to maximize its positive impact and minimize its negative impact on society.
is an identifiable problem, situation, or opportunity that requires a person to choose from among several actions that maybe evaluated as right or wrong,ethical or unethical.
Fear of not remaining anonymous
Feared retaliation form supervisor or management
Did not believe action would be taken.
Ethical Issues Categories
Conflict or Interest-when a person chooses to advance their own personal interest or those of others.
Fairness and Honesty-heart of business ethics;general values of decision makers
Communications-False and misleading
Business Relationship-must be ethical towards their customers
The process of creating and managing a business to achieve a desired objective.
any independently owned and operated business that is not dominant in its competitive area and employs fewer than 500 people.
Advantages of owning a small business
Freedom of choice
the option of working at home
Primary Forms of business organizations
Sole Proprietor-is a business owned and operated by one individual
Partnership-is an association of two or more persons who carry on as co-owners of a business for profit.
Corporation-Legal entity,created by the state,whole assets and liabilities are seperate from its owners.domestic,foreign,alien,private
Advantages of franchise
Brand name appeal
Proven products and business formats
Disadvantages of Franchise
Fees and profit sharing
Strict adherence to standardize operations
Restrictions on purchasing
limited product line
provides products,especiallyservices, for some purposes other than profits.
colleges and universities
Environmental-animal rights, pollution, global warming
community-responsibility to the general welfare of the community.
Measuring the economy
Gross domestic product-the sum of all goods and services produced in a country during a year.
Code of Ethics
Formalized rules and standards that describe what a company expects of its employees.
Whistleblowing-when a employee exposes a emplyers wrongdoing to outsiders.