33:011:100 Lecture Notes - Lecture 1: Economic System, Invisible Hand, Barnes & Noble
24 Feb 2018
School
Department
Course
Professor
Chapter 1 The Changing Face of Business
Rushi Shukla
Growing Economy = one that produces more goods and services with fewer resources over
time
Flexibility is key to long-term success/growth of a business
Business- all profit seeking activities and enterprises that provide goods and services necessary
to an economic system
- exchange between buyer and seller
Profits- rewards earned by businesspeople who take risks to create and market goods/services
-incentives to start companies
-allows expansion
-central focus of a business
-different definition of an accountant’s (revenues - expenses)
Not-for-profits - establishments that have primary objectives other than returning profits
-public service over profit
-operate in both public and private sectors
-public = government agencies, political parties
-private = museums, libraries, charities
Factors of production = Natural Resources, Capital, Human Resources, Entrepreneurship
(Example of a Factor Payment for each of the factors of production are in parentheses)
Natural Resources =agricultural land, minerals, building sites (rent)
Capital = technology (machinery & equipment), information, physical facilities (interest)
Human Resources = employees/workforce (wages)
Entrepreneurship = willingness to take risks to create/operate a business to potentially earn
profits (profit)
The Private Enterprise System
●Also known as Capitalism
●Minimizes government interference in economic activity
●Economic system rewards businesses for their ability to keep up with the demands of
consumers
Document Summary
Growing economy = one that produces more goods and services with fewer resources over time. Flexibility is key to long-term success/growth of a business. Business- all profit seeking activities and enterprises that provide goods and services necessary to an economic system. Profits- rewards earned by businesspeople who take risks to create and market goods/services. Different definition of an accountant"s (revenues - expenses) Not-for-profits - establishments that have primary objectives other than returning profits. Factors of production = natural resources, capital, human resources, entrepreneurship (example of a factor payment for each of the factors of production are in parentheses) Natural resources =agricultural land, minerals, building sites (rent) Capital = technology (machinery & equipment), information, physical facilities (interest) Entrepreneurship = willingness to take risks to create/operate a business to potentially earn profits (profit) Economic system rewards businesses for their ability to keep up with the demands of consumers. Economy is regulated by the invisible hand of competition.
