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BA 101
Introduction to
Business
1. Fundamentals of Business
and Economics
What is a Business?
Knowledge
Non-Profit
• Goods
• Education
• Services
• Libraries
• Job creation
• Museums
• Tax-base
• Social services
• Investments
• Charities
Entrepreneurs
Capital
Resources
For-Profit
Categories of Business
Producing Goods
Capital Intensive
Providing Services
Labor Intensive
Service Sector Growth

More disposable income

Lifestyle and demographic changes

Complex goods and technologies

Need for professional advice

Low barriers to entry
What is Economics?
Microeconomics
Macroeconomics
Economic System
Factors of Production
Resources
Capital
Entrepreneurs
Knowledge
Economic Systems
Free-Market
System
Capitalism
Planned
System
Mixed
Capitalism
Socialism
Privatization
Communism
Microeconomics
The Forces of Supply and Demand
Supply and Demand

Supply: Specific quantity of a product that the
seller is able and willing to provide

Demand: Buyers’ willingness and ability to
purchase products
Consumer Preferences
Price of
Substitute Products
Price of
Complementary Goods
Demand
Advertising and
Promotion Spending
Expectations About
Future Prices
Higher
Lower
Price
Consumer Income
Lower
Higher
Understanding Demand
Understanding Supply
Less
Variables
Lower
Supply
Goods and
Services
Price
More
Variables
Higher
The Relationship between Supply
and Demand


Variables that affect supply and
demand change simultaneously
and continually, thus creating
changes in the equilibrium price.
Both production levels and prices
reflect the interaction of supply
and demand.
Macroeconomics
Issues for the Entire Economy
Free-Market Competition
Pure
Competition
Monopoly
Oligopoly
Monopolistic
Competition
Competitive Advantage

Price

Speed

Quality

Service

Innovation
The Role of Government

Fostering competition

Regulating industries

Deregulating industries

Protecting stakeholders’ rights

Contributing to economic stability
Fostering Competition
Antitrust
Legislation
Mergers and
Acquisitions
Regulating and Deregulating Industries
Fair Competition
Business Ethics
Government
Regulation
Free
Competition
Working Conditions
Public Safety
Contributing to
Economic Stability
Economic
Expansion
Recovery
Fiscal
Policy
Business
Cycle
Business
Cycle
Monetary
Policy
Recession
Revenue and
Spending
Economic
Contraction
Interest
Rates
Major Economic Indicators
Housing Starts
Durable-Goods
Orders
Interest Rates
Unemployment
Statistics
Measuring Price Changes
Inflation
Purchasing Power
Consumer Price
Index (CPI)
Deflation
Measuring National Output
Dollar Value
Gross Domestic
Product (GDP)
Gross National
Product (GNP)
Final Goods
and Services
Yes
Yes
Domestic Businesses
Yes
Yes
Foreign-Owned
Businesses
Yes
No
Overseas Operations
No
Yes
Ten Economic
Performance Indicators
Prime Interest Rate
Unemployment Rate
Housing Starts
Durable-Goods Orders
Labor Productivity Rate
Balance of Trade
Rate of Inflation
Producer Price Index
Consumer Price Index
Gross Domestic Product
What does the future hold?





The aspect of terrorism
China in the global economy
Work mobility
Deficits in budget and balance of trade
E-business
Challenges of Globalization

Quality products and services

Changing needs of customers

Managing a small business

Globalization and workforce diversity

Ethics and social responsibility

Technology and electronic commerce