Economics the foundation of business

Topic of the Presentation is …

What is Economics ?

The study of how a society chooses to use scarce resources to produce

goods and services and to distribute them for consumption

Resources

Natural Resources

Capital

Resources

Labor Resources

A nation’s resources consist of three broad areas: Natural, Capital and Labor.

Natural Resources -

Resources provided in limited amount by nature, such as oil, coil, water and timber.

Capital Resources -

Goods produced for the purpose of making other types of goods and services.

Labor Resources –

The human talent, skills and competence, available in a nation.

A nation’s resources are used to produce goods and services that will meet people’s needs and wants.

Needs are goods and services people must have simply to exist.

Wants, on the other hand, are things they would like

to have but do not absolutely need for survival.

Con…

Such items are _

Food, clothing, shelter and medical care are needs.

Video recorders, fashionable clothes, sound systems etc are wants.

ALLOCATIONThe process of choosing how resources will be used to meet

a society’s needs and wants; includes the distribution of

products to consumers.

We have a basis for choosing how our resources will be

used, how they will be allocated to the best satisfy

consumers wants and needs.

Product Distribution

In this context, allocation involves an exchange ( e.g., money, goods, time, service) between a business and a consumer ( e.g., client, customer, patron)

The exchange provides mutual benefit. This is important for free economy.

ECONOMIC SYSTEMThe accepted process by which labor, capital and natural

resources are organized to produce and distribute distribute goods and services in a society.

PLANNED ECONOMYAn economy in which the government owns the productive resources, financial enterprise, retail

stores and banks.

Understanding economics is essential to Understanding business. No single definition of economics satisfies everyone. Here resources, goods and services, allocation, economic system and others all the combination make Foundation of Business in Economics.