Chapter 1 Entrepreneurship and wealth building o Goods o Services o Business Tangible products Intangible products An activity that seeks to provide goods and services to others while operating at a profit A person who risks time and money to start a business o Entrepreneur o Revenue Profit Loss Risk o Standard of Living money they have o Quality of Life The amount of goods and services people can buy with the The general well being of a society in terms of its political freedom natural environment education health care safety amount of leisure and rewards that add satisfaction and joy goods and services provide o Stakeholders All the people who stand to gain or lose by the policies and activities of the business o Outsourcing Contracting with other companies o Nonprofit Organization Entrepreneurship versus working for others o Factors of production The resources used to create wealth o More risk more reward Business Environment o The surrounding factors that either help or hinder the development of businesses o Technology Productivity E commerce database identity theft o Empowerment Giving frontline workers the responsibility authority freedom training and equipment they need to respond quickly to customer requests o Demography The statistical study of the human population with regard to its size density and other characteristics such as age race gender and income The movement of the temperature of the planet up or down o Climate Change over time o Greening The trend toward saving energy and producing products that cause less harm to the environment The Evolution of U S Business o Becoming more of a service based economy o Service era seems to be coming to a close What is Economics Chapter 2 o The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals How can we be assured of having enough resources o Resource development is the study of how to increase resources and create the conditions that will make better use of them How does capitalism create a climate of economic growth o The theory of the invisible hand and competition Basic Rights of people under capitalism o The right to private property o The right to own a business and to keep all of that business s profits after taxes o The right to freedom of competition o The right to freedom of choice What is socialism o Socialism is an economic system based on the premise that some businesses should be owned by the government Advantages and disadvantages o Creates more social equality But at the same time it lowers the incentive to work hard Tends to have higher unemployment rate and slower economic growth then capitalism What is a mixed economy o Part capitalism and part socialism Four phases of Business Cycle o Economic boom recession depression recovery Keynesian Economics o The idea is to increase government spending and cut taxes in order to stimulate the economy when the economy is in a recession When the economy seems to be growing too fast the idea is to cut back on government spending or increase taxes What is fiscal Policy o Fiscal policy consists of govt efforts to keep the economy stable by increasing or decreasing taxes or govt spending What is the importance of monetary policy to the economy o It is supposed to help stabilize the economy by providing a boost when things like unemployment are rising Chapter 5 Sole Proprietorships o You are your own boss o Unlimited liability o Limited resources o Time commitment o Limited growth o Limited life span General Partnership o Common ownership o General profits or losses o Right to participate in managing the operations of the business o Limited partners have limited liability Master limited partnership o A partnership that acts like a corporation but is taxed like a partnership Corporation limited liability S Corporation o State chartered legal entity with authority to act and have liability separate from its owners o People incorporate because there are special taz advantages and o Same limited liability but have simpler taxes like a partnership o Qualifications Fewer than 100 stockholders Stockholders must be individuals or estates and Us citizens or permanent residents and the company cannot deriver more than 25 of income from passive sources Limited Liability Corporation o LLc s may choose whether to be taxed as partnerships or corporations Merger o Two companies forming one company o Vertical horizontal or conglomerate Leverage buyouts and taking a company private Franchise o Buy the rights to use brand name and business plan and sell their goods and products o Difficult to adapt a business to different cultures o
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