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What is Business?
McGraw-Hill/Irwin
Introduction to Business 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
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Chapter 1
What is Business?
1. Differentiate the three meanings of business as commerce,
occupation and organization and identify the four main
kinds of productive resources.
2. Understand the forces of supply and demand determine fair
or market price.
3. Appreciate how a companys business model is the source of
its competitive advantage and the difference between profit
and profitability
4. Recognize the way specialization and the division of labor
through the invisible had of the market lead to increasing
profit and wealth.
5. List the reasons why business organizations are created to
structure business exchanges and facilitate business
commerce.
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Chapter 1
What is Business?
Definitions of Business
- A commerce
- An occupation
- An organization
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Chapter 1
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Definitions of Business
Business as a commerce is the process that people
produce, exchange and trade goods and services
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Chapter 1
What is Business?
Definitions of Business
Business as an occupation is the acquired set of
specialized skills and abilities that allows people to
create valuable goods and services
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Chapter 1
What is Business?
Definitions of Business
Business as an organization is the system of task and
authority relationship that coordinates and controls the
interactions between people so that they work toward
a common goal
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Chapter 1
What is Business?
Definitions of Business
Business as a system is a combination of business
commerce, occupations, and organizations that
produces and distributes the goods and services that
create value for people in a society
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Chapter 1
What is Business?
Factors of Production
Regardless of meaning there are four crucial
ingredients or productive factors or resources of land,
labor, capital and enterprise that are needed to profit
from business
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Chapter 1
What is Business?
Factors of Production
These four productive factors or resources of land,
labor, capital and enterprise that are needed to profit
from business and are limited in supply (scarcity)
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Chapter 1
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Law of Demand
Reflects the usefulness or utility from that product
Chapter 1
What is Business?
Law of Supply
Sellers are more willing to supply a product as the
price increases and less willing to supply as the price
decreases
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Chapter 1
What is Business?