1. 2 objectives identify economic needs and wants. describe the three uses of money. explain how...
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Objectives
Identify economic needs and wants. Describe the three uses of money. Explain how business satisfies
economic needs. Describe the three forms of business
ownership.
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Objectives
Describe the difference between a for-profit corporation and a nonprofit corporation.
List the four functions of business and give an example of each.
Explain the role of marketing in business.
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Marketing Terms
need want economic needs
and wants economic goods
and services exchange money value
business profit sole proprietorship partnership corporation nonprofit corporation production finance management
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Economic Needs and Wants
Need necessary for
survival
Want something you
would like, but you could survive without it
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Economic Needs and Wants
Economic needs and wants can be satisfied by buying
something
What are some of your economic wants and needs?
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Economic Needs and Wants
The items you buyto satisfy economic needs and wants are economic goods
and services
Name some economic goods and services.
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Economic Needs and Wants
Some needs and wants cannot be satisfied by buying
something
What are some needs and wants that cannot be satisfied by buying something?
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The Exchange
An exchange is a trade
Exchanges are the basis of all business
Describe an exchange you made.
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Money
Money consistent item that people
accept in exchange for goods or work
Describe American money. How is it consistent?
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Money
Without money modern business could not exist
Money is used in three ways medium of exchange unit of value store of wealth
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Medium of Exchange
Money is a convenient medium of exchange
Paper money and coins are easy to carry
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Unit of Value
Money can express the exact value of an item
– the dollar is the unit of value in the United States
The value of a product expressed in dollars
– is the price
Marketers use price to set the value of a product
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Store of Wealth
Money is easy to store You can save money until
you need it
Why do people save money?
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What Is Business?
Business general term for activities
– involved in the development and exchange of products
The term business also refers to a person or group of people
– involved in the development and exchange of products
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What Is Business?
Other terms for business firm, company,
organization, corporation, and enterprise
Describe some businesses in your neighborhood.
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What Is Business?
Business powers the economy Money flows from businesses to
workers then from the workers back to the
businesses Business provides
goods and services you use everyday wages (money) people use to buy goods
and services
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Business
Money
Money
Payment for goods and services
Payment of salary, wages, and profits
Workers
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Goal of Business Businesses aim to make a profit.
Sales Costs andExpenses Profit
What is profit?
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Forms of Business Ownership
Sole proprietorship business owned by one person
– who gets all profits and bears all risks
Partnership owned by small number of people,
usually two or three– who share profits and risks
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What Is a Corporation?
A corporation is a legal entity
established for the purpose of doing business
exists separate from the people who own it
is owned by stockholders
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What Is a Corporation?
A corporation can buy property, manufacture products, earn
money, lose money, sue, and be sued A corporation offers limited liability to its
shareholders if a corporation is sued, the corporation
pays damages from its income– the shareholders (owners) do not pay
Name some corporations.
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What Is a Nonprofit Corporation?
There are two types of corporations for-profit nonprofit
Goal of a for-profit corporation is to make a profit for its owners
Goal of a nonprofit is to benefit society
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What Is a Nonprofit Corporation?
A nonprofit corporation is a legal entity, like a for-profit corporation is established to provide a benefit to society can make a profit, but . . . any profit that a nonprofit corporation earns
goes back to support its cause or benefit Examples of benefits or causes
charity, education, medical research, youth activities, religion, and the arts
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What Is a Nonprofit Corporation?
Examples DECA American
Cancer Society Goodwill
Name some other nonprofit corporations.
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The Functions of Business
Four functions of business production
– making products finance
– handling money marketing
– focusing on customers management
– planning, coordinating, monitoring
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Production
For goods, production includes farming mining construction manufacturing
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Production
For services, production is often the service itself Examples
– TV production– hair styling
Describe production that you have seen.
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Finance
Finance includes planning and
budgeting accounting
– paying bills– receiving
payments– keeping track of
transactions
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Marketing
Marketing helps the business focus on the customer
Marketing includes selling promotion pricing learning about
customers
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Management
Management includes planning coordinating monitoring supervising
Managers look at the big picture and lead workers to make the business better
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Review
Explain the three uses of money. What are the three forms of business
ownership? What are the four functions of
business? What is the role of marketing in
business?
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Glossary
business. General term for all the activities involved in the development and exchange of products. Also used to refer to a specific person or group of people who are involved in the development and exchange of products; also called firm, company, organization, corporation, or enterprise.
corporation. Legal entity established for the purpose of doing business.
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Glossary
economic goods and services. Products that you buy to satisfy economic needs.
economic needs and wants. Needs and wants that you can satisfy by buying something.
exchange. To trade something of value for something you want.
finance. The function of business that includes all activities involving money.
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Glossary
management. The function of business that includes all the activities required to plan, coordinate, and monitor a business.
money. A consistent item that people accept in exchange for goods or work.
need. Something that is necessary for survival.
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Glossary
nonprofit corporation. Legal entity, like a for-profit corporation; however, instead of profit, its main goal is to achieve something to benefit society; also called nonprofit, nonprofit organization, or not-for-profit organization.
partnership. Business owned by a small number of people, usually two or three.
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Glossary
production. Any activity related to making a product (good, service, or idea).
profit. Money that a business has left after all the expenses and costs of running the business are paid.
sole proprietorship. Business owned by one person.
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Glossary
value. How much something is worth. want. Something you desire but you
could function without.