economics the foundation of business
需积分: 10 201 浏览量
2007-07-30
21:11:43
上传
评论
收藏 37KB PDF 举报
ECONOMICS: THE FOUNDATION OF BUSINESS
Understanding economics is essential to understanding business.7 No single definition of economics satisfies
everyone, but let's look at one concise description: Economics is the study of how a society (people) chooses to
use scarce resources to produce goods and services and to distribute them to people for consumption. This
definition raises certain issues that are key to understanding economics: (1) resources, (2) goods and services,
and (3) allocation of both resources and products. Let's discuss each of them.
Resources
A nation's resources consist of three broad areas: natural, capital, and labor. Natural resources are provided by
nature in limited amounts; they include crude oil, natural gas, minerals, timber, and water. Natural resources
must be processed to become a product or to be used to produce other goods or services.
Part One The Business Enterprise
For example, trees must be processed into lumber before they can be used to build homes, shopping malls, and
schools,
Capital resources are goods produced for the purpose of making other types of goods and services. Some
capital resources, called current assets, have a short life and are used up in the production process. These
resources include fuel, raw materials, paper, and money. Long-lived capital resources, which can be used
repeatedly in the production process, are called fixed capital. Examples include factory buildings, compact-disk
machines, personal computers, and railroad cars.
Labor resources represent the human talent of a nation. To have value in the labor force, individuals must be
trained to perform either skilled or semiskilled work. For example, the job of physicist requires extensive training,
whereas only minimal training is needed to operate a service station's gas pumps. This collection of human talent
is the most valuable national resource. Without human resources, no productive use of either natural or capital
resources is possible.
Goods and Services
A nation's resources are used to produce goods and services that will meet people's needs and wants. Needs are
goods and services people must have simply to exist. Wants, on the other hand, are things they would like to have
but do not absolutely need for survival. Such items as food, clothing, shelter, and medical care are needs; video
recorders, cassettes, fashionable clothes, and luxury vacations are wants.
A person's wants can be unlimited: as soon as one want is satisfied, another is created- Even wealthy people tend
to have unlimited wants. Henry Ford was
once asked how much money it would lake before a person would stop' wanting more- He reportedly answered,
"Just a little bit more."
Goods and services produced in the United States-each product manufactured, each service offered-are
designed to meet needs and satisfy wants of consumers. Businesses start and operate hoping to produce some item
or service that the public will like well enough or need badly enough to buy. Considering that people have many
needs plus an almost unlimited list of wants, is it possible to satisfy all of the population's needs and wants? The
answer is no.
Allocation
Resource allocation All countries face the age-old economic problem of limited resources and unlimited wants.
We all know, for example, that the supply of oil and natural gas in the United States is a limited natural resource.
Even the amount of capital resources, such as corporate stocks and bonds that can be raised during a specific
period, is limited,
Because we live in a world in which the quantity of all resources is limited, we must make choices about how
these scarce resources are to be used. To make these choices, we have to answer three fundamental economic
questions:
• What goods and services will be produced, and in what quantities? What industrial goods and what
consumer goods will be produced? Apartments or new houses? Railroad cars or large trucks?
• How will goods and services be produced, and by whom? For instance, will energy be produced from coal,
natural gas, or nuclear power?
• Who will use the goods and services? When the goods and services are divided, who is to benefit from their
use? Rich or poor? Families or single people? Old or young?
Once these questions are answered, we have a basis for choosing how our resources will be used, how they will
be allocated to best satisfy consumers' wants and needs. In a free enterprise economy, allocation of resources also
involves other issues. Should the need for business prosperity and success be a consideration? What priority
should be given to government's need for resources? In our economy, allocating resources-especially scarce
resources- involves all these questions. Allocation can be very complicated, indeed.
In the United States, answers to these questions differ from answers in Cuba, the Soviet Union, or Sweden. The
different answers are the result of the economic systems used in various countries.
Product distribution The issue of allocation is not limited to scarce resources. It also involves the distribution of
goods and services to the consumer. In this context, allocation involves an exchange (e.g., money, goods, time,
service) between a business and a consumer (e.g., client, customer, patron). In an ideal pattern of distribution in a
free economy, the business earns a profit and the customer is satisfied with the good or service: the exchange
provides mutual benefit. That is important in a free economy. A tailor able to earn a profit is likely to continue to
资源评论
