Collins 01

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Exploring Business

Exploring B

usines

s

The FoundationsThe FoundationsOf BusinessOf Business

Chapter 1Chapter 1

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Exploring Business

Exploring B

usines

s Chapter Objectives1. Identify participants, functions and

external forces of business2. Define economics & explain key

questions of economics3. Describe forms of competition4. Explain supply/demand & interaction

with price5. Understand criteria used to assess

U.S. economy6. Discuss governments role in

economy

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Exploring Business

Exploring B

usines

s Business TodayBusiness Today

Internet/CommunicationInternet/Communication TechnologyTechnology InternationalInternational

ExpansionExpansion

Diverse WorkforceDiverse Workforce Corporate/ManagementCorporate/Management

Behavior Behavior

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Exploring Business

Exploring B

usines

sIn ThisIn This

Course You Will:Course You Will:Study a real companyStudy a real companyLearn about the functionalLearn about the functional

areas of businessareas of businessSee how these areas fitSee how these areas fit

together together

Explore critical issuesExplore critical issuesaffecting businessesaffecting businessesDiscuss majors/career optionsDiscuss majors/career options

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Exploring Busines

s

Exploring B

usines

sFunctionalFunctional

Areas of BusinessAreas of Business

ManagementManagement OperationsOperations

MarketingMarketing AccountingAccounting

FinanceFinance Information TechnologyInformation Technology

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Exploring B

usines

s

Exploring B

usines

sCritical IssuesCritical Issues

Affecting BusinessAffecting

Business

Ethics andEthics andcorporatecorporateresponsibilityresponsibilityGlobalizationGlobalization

TechnologyTechnology& e-business& e-business

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Exploring B

usines

s

Exploring B

usines

s BusinessBusiness

any activity thatany activity thatprovides goods or provides goods or

services to consumersservices to consumers

for the purpose of for the purpose of making a profit.making a profit.

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Exploring B

usines

s

Exploring B

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s DistinctionsDistinctionsGoodsGoods

AthleticAthleticShoesShoes

ApparelApparel

EquipmentEquipment

ServicesBankingLegalMedicalTravel

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Exploring B

usines

s

Exploring B

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s

For ProfitFor Profit

vs.vs.

NonprofitNonprofit

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Exploring B

usines

s

Exploring B

usines

s Business ParticipantsBusiness Particip ants

OwnersOwners

EmployeesEmployees

CustomersCustomers

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Exploring B

usines

s

Exploring B

usines

sFunctionalFunctional

Areas Of BusinessAreas Of Business

ManagementManagement

OperationsOperationsMarketingMarketing

AccountingAccountingFinanceFinance

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Exploring B

usines

s

Exploring B

usines

s ManagementManage ment

planning, organizing,planning, organizing,

staffing, directing, andstaffing, directing, andcontrolling a companyscontrolling a companysresources[to] achieveresources[to] achieve

its goals.its goals.

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Exploring B

usines

s

Exploring B

usines

s OperationsOperations

converting resourcesconverting resources

into goods or servicesinto goods or servicesensuring that productsensuring that productsare of high quality.are of high quality.

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Exploring B

usines

s

Exploring B

usines

s MarketingMarketing

All of the organizationalAll of the organizationalactivities involved inactivities involved in

identifying customersidentifying customersneeds and designing,needs and designing,

pricing, promoting andpricing, promoting anddelivering products to meetdelivering products to meet

those needs.those needs.

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Exploring B

usines

s

Exploring B

usines

s Accountants

measure, summarize,and communicate

financial and managerialinformation.

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Exploring B

usines

s

Exploring B

usines

s FinanceFinance

involves planning for,involves planning for,obtaining, andobtaining, and

managing a companysmanaging a companysfunds.funds.

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Exploring B

usines

s

Exploring B

usines

sExternalExternal

Forces On BusinessForces On Business

BusinessBusiness

EconomyEconomy

Consumer Consumer TrendsTrends

GovtGovt

PublicPublicPressurePressure

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Exploring B

usines

s

Exploring B

usines

s Economics

study of how scarce

resources are used toproduce outputsgoods and

servicesto be distributedamong people.

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Exploring B

usines

s

Exploring B

usines

s Factors Of ProductionFactors Of ProductionLandLand

Labor Labor CapitalCapital

EntrepreneurshipEntrepreneurship

BusinessBusiness(Transform)(Transform)

OutputsOutputs

GoodsGoods ServicesServices

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Exploring B

usines

s

Exploring B

usines

sCircular FlowCircular Flow

Of Inputs & OutputsOf Inputs & Outputs

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Exploring B

usines

s

Exploring B

usines

s Economists QuestionsEconomists Questions

1)1) What Goods & Services ShouldWhat Goods & Services ShouldBe Produced To MeetBe Produced To MeetConsumers Needs?Consumers Needs?

2)2) How Should Goods &How Should Goods &Services Be Produced?Services Be Produced?

3)3) Who Should ReceiveWho Should ReceiveThe Goods & ServicesThe Goods & ServicesProduced?Produced?

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Exploring B

usines

s

Exploring B

usines

s Economic SystemsEconomic Sy stems

Planne

d

Planne

dFree Market

Free Marke

t

CommunismCommunism SocialismSocialism CapitalismCapitalism

Increasing Govt ControlIncreasing Govt Control

Decreasing Social ServicesDecreasing Social Services

Mixed MarketMixed MarketEconomyEconomy

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Exploring B

usines

s

Exploring B

usines

s Perfect CompetitionPerfect Compe tition

Standardized ProductStandardized Product

Many SellersMany Sellers

Many ConsumersMany Consumers

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Exploring B

usines

s

Exploring B

usines

s Supply & DemandSuppl y & Demand

SuppliedDemanded

Price

Price

UnitsUnits00 1010 2020 3030 4040 5050

$0$0

$10$10

$20$20

$30$30

$40$40

$50$50

$60$60

$70$70

EquilibriumEquilibrium

PointPoint

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Exploring B

usines

s

Exploring B

usines

sMonopolisticMonop olisticCompetitionCompe tition

Differentiated ProductDifferentiated Product

Many SellersMany Sellers

ConsumersConsumersGroup AGroup A ConsumersConsumers

Group BGroup B

ConsumersConsumersGroup CGroup C

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Exploring B

usines

s

Exploring B

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s OligopolyOligopol y

Similar ProductSimilar Product

Seller ASeller A

Consumer Consumer Group AGroup A Consumer Consumer

Group BGroup B

Consumer Consumer Group CGroup C

Seller BSeller B

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Exploring B

usines

s

Exploring B

usines

s MonopolyMonop olySeller Seller

Consumer Consumer AA

Consumer Consumer DD

Consumer Consumer BB

Consumer Consumer EE

Consumer Consumer CC

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Exploring B

usines

s

Exploring B

usines

s

Measuring WorldMeasuring WorldEconomic GoalsEconomic Goals

GrowthGrossGrowthGrossDomestic ProductDomestic Product

High EmploymentHigh EmploymentUnemployment RateUnemployment Rate

Price StabilityConsumer Price StabilityConsumer Price IndexPrice Index

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Exploring B

usines

s

Exploring B

usines

s Gross Domestic ProductGross Domestic Product

the market value of allthe market value of allgoods and servicesgoods and services

produced by the economy inproduced by the economy ina given yearincludes onlya given yearincludes only

those goods and servicesthose goods and servicesproduced domestically.produced domestically.

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Exploring B

usines

s

Exploring B

usines

s Business CycleBusiness Cy cle

-15

-10

-5

0

5

10

15

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Years

G D P

% C

h a n g e

ProsperityProsperity

DepressionDepressionRecessionRecession

RecoveryRecovery

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Exploring B

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s

Exploring B

usiness U.S. Unemployment RateU.S. Unemploy ment Rate

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Exploring B

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s

Exploring B

usiness Inflation RateInflation Rate

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Exploring B

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s

Exploring B

usiness Selected CPI ValuesSelected CPI Values

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Exploring B

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s

Exploring B

usiness Economic IndicatorsEconomic Indicators

Leading IndicatorsLeading IndicatorsNewNew UnemploymentUnemployment

ClaimsClaimsAverage WeeklyAverage Weekly

Manufacturing HoursManufacturing Hours

Building PermitsBuilding PermitsLeading IndexLeading Index

Consumer Confidence IndexConsumer Confidence Index

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Exploring B

usines

s

Exploring B

usiness

Government &Government &Economic ManagementEconomic Manag ement

Monetary PolicyMonetary Policy$ Control = Federal ReserveControl = Federal Reserve$ ContractionaryContractionary$ ExpansionaryExpansionary

Fiscal Policy$ Control = government$ Taxation$ Spending$ National Debt

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Exploring B

usines

s

Exploring B

usiness National DebtNational Debt

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Exploring B

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s

Exploring B

usiness Fields of EconomicsFields of Economics

MacroeconomicMacroeconomic sStudy of sStudy of the economy as a wholethe economy as a whole

MicroeconomicsStudy of theeconomic choices of individual

consumers & businesses