CHAPTER 1 (INTRODUCTION TO BUSINESS ENVIRONMENT)

A good definition of a business is an organization that provides goods or services in order to earn profits.

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The difference between a business's revenues and its expenses is called "sales"

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The legitimate right to pursue profits distinguishes a business from organization such as universities, hospitals, and government agencies.

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A factor of production is a nation's system for allocating resources among its citizens.

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Advertising is one of the factors of production in an advanced nation such as the United States.

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Land, labor, capital, and entreprenuership are the four traditional factors of production.

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A planned economy relies on a centralized government to control all or most of the factors of production and to make all or most production and allocation decision.

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In general, firms operate in their input market or output market, but not both.

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In socialist economy, the government owns and operates selected major industries.

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The law of demand states that buyer will purchase more of the product as its price drops and less of the products as its price increases.

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