The Dynamics of Business & Economics
1.1 What is Business?
1.2 Goal of Business
1.3 Economic Systems
1.3.1 Types of Economic System
1.4 Factors of Production
1.5 Private Enterprise System
This chapter aims to:
Introduce the basic concepts of business and economic system; profit, types of economic system, factors of production and private enterprise.
1.1. What is Business?
Do you realize that these three words carry the same meaning?
If you come across the words firm, enterprise, or business, one thing that you should know is all of them mean the same. What do these words actually mean?
Business can be defined as an organization which operates with the aim of generating profits by selling one or more products.
Business can also be interpreted as an organization which objective is to earn profits by providing goods or services.
Can you spot the similarity in both of the definitions? Yes, business is all about making money through the sale of products, be it goods or services.
Five Stars Communication Sdn. Bhd. was set up a year ago by Mr. Radzi Abdullah. It sells a variety of cell phones and their accessories. Apart from that, Five Star too renders repair services of cell phones to its customers. For the twelve-month period ending December 31, 2008, the company was expected to generate a profit of RM50 000.
As you can see from the scenario given, Five Stars Communication Sdn. Bhd. is an organization operating with the objective of earning profits (in this case, RM50 000) from the sale of multiple products which constitute of cell phones, cell phone accessories, as well as repair services.
Now that you have learnt what business is, try and list down two businesses in your neighborhood that sell goods, two that sell services, and another two businesses that offer both.
1.2. The Goal of Business
As you set about starting a...