Microeconomics Principles: Supply and Demand, Market Efficiency, and Government Intervention
What is Economics?
Economics is the study of how society manages its scarce resources.
Scarcity means that society has limited resources and therefore cannot produce all the goods and services people wish to have. This leads to imports, for example, in the agriculture sector.
Efficiency vs. Equity
Efficiency means society gets the most it can from its scarce resources.
Equity means the benefits of those resources are distributed fairly among the members of society.
Ten Principles of Economics
- People face
Business Creation and Implementation Guide
ITEM 12: Business Creation and Implementation
Self-Employment and Employers
Self-Employment: Individuals working independently, without direct reliance on other workers.
Employer: Entities, including individuals or legal persons (public or private), that hire employees to produce goods or provide services.
1. Self-Employment
Reasons for starting a business include personal benefits, following family traditions, and identifying business opportunities.
Production units (firms) require factors of production
Read MoreSupply & Demand: Elasticity, Factors, and Market Analysis
Supply and Demand
Demand
Demand: The quantity of a good or service that consumers are willing and able to buy at various prices within a given time period, other factors besides price held constant.
Note: Changes in price lead to movement along the demand curve; changes in non-price factors lead to shifting of the demand curve.
Factors That Can Cause Demand to Change:
- Taste and Preferences
- Income
- Prices of Related Products
- Future Expectations
- Number of Buyers
Supply
Supply: The quantity of a good or service
Read MoreUnderstanding Personal Finance: A Glossary of Terms and Concepts
Vocab
Banking and Credit
Operating Costs: The costs associated with operating a business.
Fixed Costs: Costs that are constant, such as rent, that you incur every month.
FDIC: Insures bank deposits up to $500,000.00
Variable Costs: Costs that change every month.
Compound Interest: Interest that is calculated on a monthly basis; interest charged on top of both principal and interest.
Competition: Two or more businesses competing for the same customers.
Bank Fee: A charge for services such as an item or checking
Read MoreProduct, Brand, and Distribution
The Product
What is a Product?
– A material item that companies offer their customers in the market.
– Is something more than a set of physical features, a package, and a brand.
– Warranty: after-sales service, conditions of payment, satisfaction, and benefits they provide to the customer are also key elements in the success of a product.
The Idea
– Behind each product lies an idea.
– Did you know? That 9% of new food products fail.
What is a Product Range?
– The product range refers to all the different
Read MoreUnderstanding Business and Social Responsibility
Chapter 1: Introduction to Business
Why Study Business?
There are numerous compelling reasons to study business:
- Enhance your career prospects as an employee.
- Gain the knowledge and skills to start your own business.
- Become a more informed consumer and investor.
- Make informed career choices.
- Develop valuable management skills.
Tips for Success in Business Studies
- Prepare for class by reading assigned chapters.
- Highlight or underline key concepts.
- Take thorough notes.
- Apply learned concepts to real-world situations.