Download Preventing Unfair Business Practices

Introduction to Business
Ch 9: Government in Our Economy
Our Government
• Main Purpose of Federal Government
– Oversee the activities that involve two or more
states or other countries
– Constitution gives the federal government the
power to regulate foreign and interstate
commerce
– Interstate Commerce – Business transactions
involving companies in more than one state
Our Government
• Main Purpose of State Government
– Regulate business activities within their own
boundaries
– Intrastate commerce – Business transactions
involving companies that do business only in one
state
Our Government
• Main Purpose of Local Government
– Provide services needed for an orderly society
• Ex – Police and Fire Department
Government Protects
• How does the government protect our rights?
– Police and Fire Departments
– Armed Forces
– Laws for safe work environment
• Safety standards for building, machines, and chemicals
– OSHA (Occupational Safety and Health Administration)
Government Protects
• How does the government protect our rights?
– Protect the basic human rights of workers
• Cannot be denied work because of you race, religion,
sex, or age.
• Selection must be based on job requirements, training,
and experience
Government Protects
• How does the government protect our rights?
– Protect air, water, noise, and chemical pollution
• EPA (Environmental Protection Agency)
Government Protects
• How does the government protect our rights?
– Contracts and Special Property Rights
• Patents, Copyrights, and Trademarks
– Protect inventions and ideas that might profit for a company
in the future
Contracts
• Contract – An agreement to exchange goods
or services for something of value
– May be written or unwritten
• Must include:
– Agreement – An offer must be made and an acceptance must
occur.
– Competent Parties – Those entering into the contract must be
of legal age and must be mentally competent
– Consideration – Something of measureable value must be
exchanged
– Legality – Must be for a product or service that may be legally
sold
Intellectual Property Rights
• Intellectual Property – Property that is purely
intangible that a person cannot touch
– Patents
• Gives that inventor the exclusive right to make, use, or
sell the item for 17 years
• Prevents other companies from making or selling a
product that your company has created.
Intellectual Property Rights
• Copyrights
– Protects the creative works of authors,
composers, and artists
– Protection continues for the life of the person
receiving the copyright and for 50 years after the
persons death.
–©
Intellectual Property Rights
• Trademark
– Word, letter, or symbol associated with a specific
company or product
– Company names, team emblems, or label designs
may be registered with the government
• Logo – Symbol identified throughout the world
• TM – Unregistered
•
Registered
• Last forever
Government Regulates
• Public Utilities – Organization that supplies a
service or product vital to all people
– Water, Electric, Gas, Telephone
– Privately owned but are closely regulated by the
government
– Companies cannot set prices as they wish
Government Regulates
• Preventing Unfair Business Practices
– Government attempts to promote fair
competition
– Monopolies – When a business has control of the
market for a product or service.
• Creates no competition and can set the prices as they
wish
• Could provide poor quality products
• Antitrust Laws – Created to prevent monopolies and
promote completion and fairness
Government Regulates
• Preventing Unfair Business Practices
• Antitrust Laws – Created to prevent monopolies and
promote competition and fairness
– Also prevents other unfair business practices such as false
advertising, deceptive pricing, and misleading labeling.
» Each of these hurts and reduces consumer choice
Government Assists Businesses
• Purchase Products and Services
– Roughly 20% of all goods and services purchased
in the US
• Hire Workers
– Government is the single largest employer
– About 1 out of every 9 worker is a public
employee
Government Assists Businesses
• Government Raises Money
– Revenue – Income raised
• Gov’t raises revenue through Taxes and Borrowing
– Additional sources of revenue:
» Fines, Fees, and Licenses
– Taxes – Levied on earnings, value of property, and
on the sale of goods and services.
Government Assists Businesses
• Government Raises Money
– Taxes
• Income Taxes – Levied on the income of the individual
– Largest source of revenue for the federal government
• Corporate Taxes – Based on the businesses profits
• Property Taxes – Largest source of income for Local
Governments
– Based on the value of your real estate
– Used to pay for schools and other government services, such
as police, fire, community parks, and libraries.
Government Assists Businesses
• Government Raises Money
– Taxes
• Sales Tax – based on the things we buy.
– Borrowing
• Bonds – Borrower pays back the debt plus interest.
– Very little risk for the buyers of bonds