Business Foundations: A Changing World 13th Edition

Chapter 1: The Dynamics of Business and Economics
SUMMARY
LEARNING OBJECTIVES
KEY TERMS AND DEFINITIONS
CONTENT OUTLINE
BOXED TEXT DISCUSSION QUESTIONS WITH SUGGESTED ANSWERS
Enter the World of Business: Inside the Zoom Boom
Responding to Business Challenges: Taylor Swift Fights Scalpers
Business Disruption: Competition Is Brewing in Kombucha Market
Technology and the Economy: Up in the Air: Drones and Air Traffic Control
So You Want a Job in the Business World
END OF CHAPTER TEACHING RESOURCES
Check Your Progress
Get Involved
Build Your Skills: The Forces of Supply and Demand
Solve the Dilemma: Mrs. Acres Homemade Pies
Build Your Business Plan: The Dynamics of Business and Economics
See for Yourself Case: Tesla: More Than a Car Company
Team Exercise
CONNECT ACTIVITIES
GrubHub Excels Amidst the Changing Business Environment
Uber and Its Effect on the Sharing Economy
iSeeIt! Video Case: Supply and Demand
BONUS TEACHING RESOURCES
Term Paper or Project Topic
Guest Speaker Suggestions
Teaching Suggestions
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SUMMARY
We begin our study of business in this chapter by examining the fundamentals of business and
economics. First, we introduce the nature of business, including its goals, activities, and
participants. Next, we describe the basics of economics and apply them to the U.S. economy.
Finally, we establish a framework for studying business in this text.
LEARNING OBJECTIVES
LO 1-1 Define basic concepts such as business, product, profit, and economics.
LO 1-2 Identify the main participants and activities of business.
LO 1-3 Explain why studying business is important.
LO 1-4 Compare the four types of economic systems.
LO 1-5 Describe the role of supply, demand, and competition in a free enterprise system.
LO 1-6 Specify why and how the health of the economy is measured.
LO 1-7 Outline the evolution of the American economy.
LO 1-8 Explain the role of the entrepreneur in the economy.
LO 1-9 Evaluate a small business owner’s situation and propose a course of action.
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KEY TERMS AND DEFINITIONS
big data Large volumes of structured and unstructured data that are
transmitted at very fast speeds.
blockchain A decentralized record-keeping technology that stores linked.
budget deficit The condition in which a nation spends more than it takes in from
taxes.
business Individuals or organizations who try to earn a profit by providing
products that satisfy people’s needs.
capitalism (free
enterprise)
An economic system in which individuals own and operate the
majority of businesses that provide goods and services.
communism First described by Karl Marx as a society in which the people,
without regard to class, own all the nation’s resources.
competition The rivalry among businesses for consumers’ dollars.
demand The number of goods and services that consumers are willing to buy
at different prices at a specific time.
depression A condition of the economy in which unemployment is very high,
consumer spending is low, and business output is sharply reduced.
drones unmanned aerial devices, can be programed with AI to perform
human tasks such as delivering products or collecting
environmental data and imagery.
economic contraction A slowdown of the economy characterized by a decline in spending
and during which businesses cut back on production and lay off
workers.
economic expansion The situation that occurs when an economy is growing and people
are spending more money; their purchases stimulate the production
of goods and services, which in turn stimulates employment.
economic system A description of how a particular society distributes its resources to
produce goods and services.
economics The study of how resources are distributed for the production of
goods and services within a social system.
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entrepreneur An individual who risks their wealth, time, and effort to develop for
profit an innovative product or way of doing something.
equilibrium price The price at which the number of products that businesses are
willing to supply equals the amount of products that consumers are
willing to buy at a specific point in time.
financial resources
(capital)
The funds used to acquire the natural and human resources needed
to provide products; also called capital.
free market system Pure capitalism, in which all economic decisions are made without
government intervention.
gross domestic product
(GDP)
The sum of all goods and services produced in a country during a
year.
human resources (labor) The physical and mental abilities that people use to produce goods
and services; also called labor.
inflation A condition characterized by a continuing rise in prices.
mixed economies Economies made up of elements from more than one economic
system.
monopolistic competition The market structure that exists when there are fewer businesses
than in a pure competition environment and the differences among
the goods they sell are small.
monopoly The market structure that exists when there is only one business
providing a product in a given market.
natural resources Land, forests, minerals, water, and other things that are not made by
people.
nonprofit organizations Organizations that may provide goods or services but do not have
the fundamental purpose of earning profits.
oligopoly The market structure that exists when there are very few businesses
selling a product.
open economy An economy in which economic activities occur between the
country and the international community.
product A good or service with tangible and intangible characteristics that
provide satisfaction and benefits.
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profit The difference between what it costs to make and sell a product and
what a customer pays for it.
pure competition The market structure that exists when there are many small
businesses selling one standardized product.
recession A decline in production, employment, and income.
socialism An economic system in which the government owns and operates
basic industries, but individuals own most businesses.
stakeholders Groups that have a stake in the success and outcomes of a business.
standard of living Refers to the level of wealth and material comfort that people have
available to them.
supply The number of products—goods and services—that businesses are
willing to sell at different prices at a specific time.
technology includes the methods and processes creating applications to solve
problems, perform tasks, and make decisions.
unemployment The condition in which a percentage of the population wants to
work but is unable to find jobs.