Business organization
1 BO is profit-seeking enterprise1 that serves as the main link between scarce resources and consumer satisfaction.
2. the main purpose of BO is to satisfy people’s wants
3. There are three major kinds of business organizations: the sole proprietorship2, the partnership3 and the corporation
4. . sole proprietorship is a business owned and run by one person, Sole proprietors own all the profits of their enterprises and are free to make whatever changes they please
5. The main advantage of a sole proprietorship is that it is the easiest form of business to start and run
6. The major disadvantage of a sole proprietorship is the unlimited liability8 that each proprietor faces, it has limited financial resources
7. the unlimited liability is liability for9 all financial losses or debts that the business may incur
8. A partnership is a business that is jointly owned by two or more people who have combined their talents and resources for the purpose of earning a profit
9. there are such forms of partnership as general partnership and limited partnership.
10. In the GP partners share profits and looses, responsible for the management of the business and in the LP partners are only liable for the amount they have invested in the business and usually not involved in the management of the firm.
.11. they are easy to form and often get tax benefits5 from the government.
12. The major disadvantage is unlimited financial liability, that partners may disagree with each other causing management conflicts.
13. A business corporation is an institution established for the purpose of making profit.
it is necessary to get file for permission, charter to form a corporation.
It is operated by individuals
the main advantages of corporation ownership are the ability to acquire greater financial resources, it attracts a large amount of capital, it has great capacity for growth and expansion
the main disadvantages of corporation ownership are is difficult and expensive to organization, an extra tax on corporate profits.
Factors of production
The reason people cannot satisfy all their wants and needs1 is the scarcity of productive resources
factors of production2 are called land, labour, capital, and organization or entrepreneurship
As an economic term land means the gifts of nature4 or natural resources not created by human efforts
economists tend to think of land as being fixed or in limited supply
is labour is people with all their efforts and abilities.
national labour force is all nations working population
factors such as population growth, immigration, famine, war and disease have had a dramatic impact5 on both the quantity and quality of labour
labour may be mental or physical.
unskilled workers perform low paid job.
workers with mechanical ability fall into combined category of labour
skilled workers are able to do any job.
labour is the human effort required to produce goods and services.
wage rate is the wage over a period of time, such as an hour or week
qualification level, quantity of working hours are affecting the wage rate
The third factor of production is capital
financial capital is the money used to buy the tools and equipment used in production, physical capital is goods.
When the three inputs5 — land, labour and capital — are present, production or the process of creating goods and services, can take place
Entrepreneurship is the managerial or organizational skills6 needed by most firms to produce goods and services
19.The entrepreneur brings together the other three factors of production — land, labour and capital.
ECONOMY OF THE USA
1.the federal government does play an important part in the national economy. It provides services and goods that the market cannot provide effectively, such as national defense, public goods and services1, assistance programs for low-income families2, and interstate highways and airports
2.international trade increases the total level of production and consumption in the world, lowers the cost of production and prices, that consumers pay, and increases the living standard
3.The US economy is divided into four sectors.
4.The first sector provides goods that come directly from natural resources, The second sector includes manufacturing and the generation of electricity. The third sector, made up of commerce and services, The fourth major economic sector deals with recording, processing, and transmission5 of information, and includes the communication industry
5.The leading categories of the US manufactured goods are chemicals, industrial machinery, electronic equipment, processed foods, and transportation equipment.
6.the largest sector of the economy in terms of output and employment is the service and commerce sector
7.it serves the nation's largest urban, industrial, and population concentrations
8.the major mineral resourses of the usa are phosphate, gold, silver, iron ore, copper, lead, zinc, natural gas, and coal.
9.Petroleum production is third in the world, after Russia and Saudi Arabia
10.Agricultural output in the United States has historically been among the highest in the world, but it accounted for only 2 percent of annual GDP and employed only 3 percent of the workforce.
11.Cultivated farmland constitutes 19 percent of the land area of the country and makes the United States the world's richest agricultural nation.
12.Farmers in the United States not only produce enough food to feed the nation’s population, they also export more farm products than any other nation.
13.Cattle production, hog production, and chicken production are widespread throughout the United States
14.farms produce great quantities of agricultural output using small amounts of labor and land
MARKETS AND MARKET STRUCTURES
The term market, as used by economists, is an extension of the ancient idea of a market as a place where people gather to buy and sell goods. In former days part of a town was kept as the market or marketplace, and people would travel many kilometres on special market-days in order to buy and sell various commodities.
market is any situation where buyers and sellers are in contact with each other. This could be a street market or it could be a world market where buyers and sellers communicate via letters, faxes, telephones, and representatives.
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one market may be highly competitive because a large number of firms produce similar products. Another may be less competitive because of fewer firms, or because the products made by each are different or unique.
Economists classify markets according to certain structural characteristics
market structure is defined by sharing most firms in the market
Economists have names for different market structures: pure competition1, monopolistic competition2, oligopoly, and monopoly.
pure competition is a market situation in which there are many independent and well-informed buyers and sellers of exactly the same economic products
monopolistic competition is situation when By making its product a little different, a firm may try to attract more customers and take over the economic market
The one thing that separates monopolistic competition from pure competition is product differentiation