MGMT 1 Chapter Notes - Chapter 2: State Capitalism, Market Price, Free Market
29 Sep 2016
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2 understanding economics and how it affects business. Economics: the study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing individuals. Some would describe economics as the study of allocation of scarce resources. Microeconomics looks at the behavior of people and organizations in markets for particular products or services. Microeconomics looks at the operation of a nation"s economy as a whole. Businesses can contribute to an economic system by inventing products that greatly increase available resources (resource development) According to adam smith, when people work for themselves, they end up helping the entire economy. Capitalism: economic system in which all or most of the factors of production are privately owned or operated for profit. One major issue of capitalism is income inequality. Conscious capitalism: capitalism based on businesses that serve all major stakeholders. State capitalism: combination of freer markets and some government control.
