Define Business.
A BUSINESS is an organization that provides
GOODS and/or SERVICES to the consumer to
satisfy needs and wants.
What is the difference between a good and a service?
GOODS:
Products that we can see and touch that we buy in exchange for money
SERVICES:
Products that we cannot see or touch Assistance given to another person in exchange for money
What is the difference between profit and non-profit?
For-Profit Business:
Produces or sells goods/services to satisfy the needs, wants, and demands of consumers for the purpose of a making PROFIT.
Non-Profit Organizations:
raise funds for a specific goal serve people and their communities charities and charitable organizations allowed to raise such funds
- What are the different forms of business ownership? (i.e. sole proprietorship, etc.)
- sole proprietorship- owned by one person
- Partnership- owned by two people, shares costs etc
- Corporation- legal status, with rights, privileges, liabilities for the people that work there and the business can also have stocks or sharing. Important fact: they can be as small as one person business.
Types of corporation
- Public – publically traded shares
- Private – no publically traded shares
- Crown – operated by the government
- Municipal – towns and cities that are incorporated
- Co-operative- A business owned by the workers or members who buy the products or use the services that the business offers and not profit.
- Franchise- The franchiser licenses the rights to its name, operating procedure, designs, and business expertise to another business called the franchisee.
A franchise agreement can provide the franchisee with:
* a ready made, fully operational business
* brand recognition that is appealing to consumers
What is the formula for Profit?
Profit = Revenue - Cost
What is the difference between needs and wants?
When you want something but don’t need it, it’s a WANT and when you need something, it is a NEED.
What are the economic resources also known as? List them.
- Natural Resources
◦ Materials that come from the earth, water or air
◦ Examples: Soil, iron, wildlife, agricultural goods, oxygen - Human Resources
◦ People who work to create goods and services
◦ Examples: Farmers, factory workers, teachers, nurses, bankers - Capital Resources
◦ Items (assets) that last a long time and need substantial financial
investment to start or run a business
◦ Examples: funds, buildings, equipment, tools, trucks
What is interdependence?
Businesses are interdependent, which means they rely on the goods and services from a variety of
businesses to satisfy consumer needs and wants.
What is supply and demand? How does it affect price?
Demand is the quantity of a good or service that consumers are willing and able to buy at a particular price. Law of demand and its relationship to prices and consumers:
- When prices decrease consumers buy more;
and demand goes up . - When prices increase consumers buy less;
and demand goes down
Supply is the quantity of a good or service that businesses are willing and able to provide within a range of prices that people would be willing to pay. Increasing the quantity supplied as prices increase is called the law of supply.
