Unit 3: Chapter 11

Economics is a word that is used a lot in business, but what does it really mean? Simply speaking, economics is the transfer of goods, services, and money. Economics is a part of mathematics, as it’s measured with numbers. As with most things in business, people are a very important factor. There are many factors in economics, and having a good understanding of them can be very helpful in running a successful business.

One important factor in economics is customer wants and needs. Customers will buy goods and services in order to satisfy their wants and needs. This is why restaurants are such a common business, as food is something that customers need often. Another reason why restaurants are so successful is the lack of scarcity. Scarcity is when there are not enough goods and services to satisfy customer demand. In a business, scarcity is always present in some way, whether it be money, supplies, people, time, etc. 

Economic systems are put in place to manage how people receive their goods and services. Economic systems vary based on location, and heavily influence businesses. An economic system dictates what, how, how many, and for who goods and services are produced. Different economic systems are controlled by different people. There are three main types of economies, one controlled by the government, one controlled by the people, and one controlled by both. No economic system is purely controlled by the government or the people, they all fall somewhere between the two. Governments controlling the economy results in regulations like the FDA, which keeps consumers safe. Governments are also responsible for money, as it has no value without government regulation. Economies controlled by the people results in systems like barter, where goods and services are exchanged for other goods and services. Economic systems are the foundation of business as we know it today.

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