Some Important Business Definitions.

1- Why more countries become capitalistic?
2- Economic forces affecting business.
3- What does profit mean?           
 4- Scarcity & opportunity cost.

1- Why more countries become capitalistic?

- Countries around the world are becoming more capitalistic because people in capitalistic countries enjoy higher standard of living than people in communist or socialist societies.

2- Economic forces affecting business


- You can view the business at two levels. Macroeconomics looks at the economy as a whole and microeconomics consider the actions of & the influences on specific parts. Such as households, companies, or industries. For an example a national unemployment trend is a macroeconomic issue, but unemployment in the auto industry is a microeconomic issue.

3- What does profit mean?

- Profit means the difference between what it costs to produce & market something and what customers are willing to pay for it. But many companies choose to sacrifice short-term profits for the sake of long term goods. This strategy helps explain the success of Japanese imports in U.S.
- It isn't an easy strategy to implement; you can need deep pockets & patient investors.

4- Scarcity & opportunity cost.

- most resources are scarce. Scarcity means a shortage in desirable resources, so it is hard to make choices. For example if you have $20 in your pocket, do you spend it in good dinner? Do you save it to future use? Do you use it to go shopping? You may choose one only for these options but as soon as you spend $20 it's gone you can't do anything else. There's a simple concept called opportunity cost if you decide to spend it in good dinner. Not only would that decision cost you $20, but it would also cost you the opportunity of buying some thing else.
To be continued

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