-.z.Unit1ThepurposeofbusinessactivityANEEDisagoodorserviceessentialforliving.AWANTisagoodorservicewhichpeoplewouldliketohave,butwhichisnotessentialforliving,People’swantsareunlimited.TheECONOMICPROBLEMresultsfromtherebeingunlimitedwantsbutlimitedresourcestoproducethegoodsandservicestosatisfythosewants.Thiscreatesscarcity.FACTORSOFPRODUCTIONarethoseresourcesneededtoproducegoodsorservices.Therearefourfactorsofproduction:landlabourenterprisecapital.Theyareinlimitedsupply.SCARCITYisthelackofsufficientproductstofulfilthetotalwantsofthepopulation.OPPORTUNITYCOSTisthene*tbestalternativegivenupbychoosinganotheritem.DIVISIONOFLABOURiswhentheproductionprocessissliptupintodifferenttasksandeachworkerperformsoneofthesetasks.ItisalsoknownasSPECIALISATION.BUSINESSbinesfactorsofproductiontomakeproductswhichsatisfypeople’swants.BUSINESSOBJECIVESaretheaimsortargetsthatabusinessworkstowards.1.Tomakeaprofit.2.Toincreaseaddedvalue3.Toe*pandthebusiness.4.Toachievebusinesssurvival5.Toprovideaservicetothemunity.VALUEADDEDisthedifferencebetweensellingpriceofaproductorserviceandthecostofboughtinmaterialsandponents.ASTAKEHOLDERisanypersonorgroupwithadirectinterestintheperformanceofabusiness.SocietyManagerSuppliersGovernmentCreditorOwnerWorkersCustomersUnit2TypeofbusinessactivityThePRIMARYSECTORofindustrye*tractsandusesthenaturalresourcesoftheearth.TheSECONDARYSECTORofindustrymanufacturesgoodsusingtherawmaterialsprovidedbytheprimarysector.TheTERTIARYSECTORofindustryprovidesservicestoconsumersandtheothersectorsofindustry.DE-INDUSRIALISATIONoccurswhenthereisadeclineintheimportanceofthesecondary,manufacturingsectorofindustryinacountry.AFREEMARKETECONOMYhasnogovernmentcontroloverfactorsofproduction.It’salsoknownasaMARKETECONOMY.AMONOPOLYisabusinesswhichcontrolsallofthemarketforaproduct.AMANDECONOMYdoesnothaveaprivatesectorasallresourcesareownedbythestate.AMI*EDECONOMYhasbothaprivatesectorandapublicsector.CAPITAListhemoneyinvestedintoabusinessbytheowners.PROFITisthesurplusaftertotalcostshavebeensubtractedfromsalesrevenue.INTERNALGROWTHoccurswhenabusinesse*pandsitse*istingoperations.E*TERNALGROWTHiswhenabusinesstakesoverormergeswithanotherbusiness.ItisoftencalledINTEGRATIONasonefirmtogethertomakeonebusiness.AMERGERiswhentheownersoftwobusinessesagreetojointheirfirmstogethertomakeonebusiness.ATAKEOVERorACQUISITIONiswhenonebusinessbuysouttheownersofanotherbusinesswhichthenbeespartofthe‘predator’business.HORIZONTALINTERGRETIONiswhenonefirmmergeswithortakesoveranotheroneinthesameindustryatthesamestageofproduction.VERTICALINTERGRETRTIONiswhenonefirmmergeswithortakesoveranotheroneinthesameindustrybutdifferentstagesofproduction.VerticalintegrationcanbeFORWARDorBACKWARD.CONGLOMERATEINTEGRATIONiswhenonefirmmergeswithortakesoverafirminapletelydifferentindustry.ThisisalsoknownasDIVERSIFICATION.Unit3FormsofbusinessorganizationLIMITEDLIABILITYmeansthattheownersofpany-shareholderscannotbeheldresponsibleforthedebtsofthepanytheyown.Theirliabilityislimitedtotheinvestmenttheymadeinbuyingtheshares.UNLIMITEDLIABILITYmeansifbusinessfailstoreplybusinessdebts.Thecreditorwillforcetheownertosellallhisownprocessiontopaythedebts.APARTNERSHIPAGREEMENTisthewrittenandlegalagreementbetweenbusinesspartners.Itisnotessentialforpartnerstohavesuchanagreementbutitisalwaysremended.AnUNINCORPORATEDBUSINESSisonethatdoesnothaveseparatelegalidentity.Soletradersandpartnershipsareunincorporatedbusiness.SHAREHOLDERSaretheownersofalimitedpany.Theybuyshareswhichrepresentpartownershipofapany.APROSPECTUSisadetaileddocumentissuedbythedirectorsofapanywhentheyareconvertingittopubliclimitedpanystatus.Itisaninvitationtothegeneralpublictobuysharesinthenewlyformedplc.ANNUALGENERALMEETING(AGM)isalegalrequirementforallpanies.Allshareholdersmayattend.TheyvoteonwhotheywanttobeontheboardofDirectorsfortheingyear.DIVIDENDSarepaymentsmadetoshareholdersfromtheprofitsofapanyafterithaspaidcorporationta*.Theyarethereturntoshareholderforinvestinginthepany.AFRANCHISEisabusinessbasedupontheuseofthebrandnames,promotionallogosandtradingmethodsofane*istingsuccessfulbusiness.Thefranchiseebuysthelicensetooperatethisbusinessfromthefranchisor.Unit4GovernmentandeconomicinfluencesonbusinessINFLATIONistheincreaseintheaveragepricelevelofgoodsandservicesovertime.UNEMPLOYMENTe*istswhenpeoplewhoarewillingandabletoworkcannotfindajob.ECONOMICGROWTHiswhenacountry’sGrossDomesticProductincreasesmoregoodsandservicesareproducedthaninthepreviousyear.TheBALANCEOFPAYMENTSrecordsthedifferencebetweenacountry’se*portsandimports.REALINEisthevalueofineandfallswhenpricesrisefasterthanmoneyine.GROSSDOMESTICPRODUCT(GDP)isthetotalvalueofoutputofgoodsandservicesinacountryinoneyear.TRADECYCLE:→Growth→Boom→Recession→Slump→Growth→Boom→E*PORTSaregoodsandservicessoldfromonecountrytoothercountries.IMPORTSaregoodsandservicesboughtfromonecountrytoothercountries.TheE*CHANGERATEisthepriceofonecurrencyintermsofanother,fore*ample￡1:$1.5E*CHANGERATEDEPRECIATIONisthefallinthevalueofacurrencyparedwithothercurrencies.

Balanceofpayment=Revenuefrome*ports–spendingonimportsDIRECTTA*ESarepaiddirectlyfromines-fore*ample,ineta*orprofitta*.INDIRECTTA*ESareaddedtothepricesofgoodsandta*payerspaytheta*astheypurchasethegoods-fore*ample,VATDISPOSABLEINEisthelevelofineata*payerhasafterpayingineta*.AnIMPORTTARIFFisata*onanimportedproduct.AnIMPORTQUOTAisaphysicallimittothequantityofaproductthatcanbeimported.MONETARYPOLICY貨幣政策

isachangeininterestratesbythegovernmentorcentralbank,e.g.theEuropeanCentralBank.E*CHANGERATEAPPRECIATIONistheriseinthevalueofacurrencyparedtoothercurrencies.SUPPLYSIDEPOLICIES供應(yīng)政策areusedbygovernmenttoimprovetheefficientsupplyofgoodsandservicesintheircountries.CONSUMERPRETECTION:1951WeightandMeasuresAct1968TradeDescriptionAct1974ConsumerCreditAct1979SalesofGoodsAct1987ConsumerProtectionArt

MONOPOLIES-特征:

1Haveeliminatedtheirpetitorsbymergersortakeovers

2Inventaproductandpreventotherfirmsfrommakingit

3Betooe*pensiveforotherfirmstosetupinpetitionCONTROLOFMONOPLIES

1Decisiontakenbymonopolistswhicharethoughttobeagainstconsumerinterests-suchastryingtoeliminatepetitorsorrefusingtosupplyretailerswhichchargelowpricesorsellpetingproducts.

2Proposedmergersortakeoversthatwillcreateamonopoly.PROTECTIONAGAINSTUNFAIRDISCRIMINATION

1975Se*DiscriminationAct

1976RaceRelationsAct

1994DisabilityDiscriminationActPROTECTIONOFHEALTHANDSAFETY

1Protectworkersfromdangerousmachinery

2Providesafetyequipmentandclothing

3Maintainreasonableworkplacetemperature

4Providehygienicconditionsandwashingfacilities

5Donotinsistone*cessivelylongshiftsandprovidebreaksintheworktimetable.PROTECTIONAGAINSTUNFAIREDISMISSAL

1Joiningatradeunion

2Beingpregnant

3WhennowarningsaregivenbeforedismissalWAGEPROTECTION

1Thewageratetobepaid

2Howfrequentlywageswillbepaid

3Whatdeductionswillbemadefromwages,fore*ample,ineta*AnETHICALDECISIONisadecisiontakenbyamanagerbecauseofthemoralcodeobservedinthatfirm.Thiscanincludeimprovingworkingconditionsforstaffbeyondlegalrequirements,ornotproducingdangerousorpollutinggoods-eveniftheseactivitiesarenotillegal.AnINDUSTRIALTRIBUNALisalegalmeetingwhichconsidersworkers’plaintsofunfairdismissalordiscriminationatwork.AnCONTACTOFEMPLOYMENTisalegalagreementbetweenemployeelistingtherightsandresponsibilitiesofworkers.PLANNINGPERMISSIONisgivenbyagovernmentbodytoallowabusinesstobuildafactoryorofficeinaparticularlocation.Thispermissioncanberefusedifthesiteisnotsuitable.ADEVELOPMENTAREAisaregionofacountrywherebusinesseswillreceivefinancialsupporttoestablishthere.Highunemploymentisoftenaproblemintheseareas.Unit5Othere*ternalinfluencesonbusinessACONSTRAINTonabusinessissomethingthatlimitsorcontrolshisactionsordecisions.E*TERNALCONSTRAINTSarethoseoverwhichabusinesshasnodirectcontrol.SOCIALRESPONSIBILITYiswhenabusinesstakesdecisionsthatmanybenefitshareholdersotherthanshareholders,e.g.adecisiontoreducepollutionofthelocalenvironmentbyusingthelatestandleast‘dirty’productionequipment.PRESSUREGROUPSareformedbypeoplewhoshareamoninterestandwhowilltakeactiontrytochangegovernmentpolicyorbusinessdecision.COST-BENEFITANALYSISisthevaluationbyagovernmentagencyofalle*ternalandprivatecostsandbenefitsresultingfromabusinessdecision.E*TERNALCOSTSarethecostspaidbytherestofsociety,otherthanthebusiness,asaresultofabusinessdecision.E*TERNALBENEFITSarethegainstotherestofsociety,otherthanthebusiness,resultingfromabusinessdecision.PRIVATECOSTSarethecostsofabusinessdecisionactuallypaidforbythebusiness.PRIVATEBENEFITSarethefinancialgainsmadebyabusinessasaresultofabusinessplan.SOCIALCOSTistheadditionoftheprivateande*ternalbenefitsofabusinessdecision.SOCIALBENEFITistheadditionoftheprivateande*ternalbenefitsofabusinessdecision.Unit6BusinesscostsandrevenueFI*EDCOSTSarecostswhichdonotvarywiththenumberofitemssoldorproducedintheshortterm.Theyhavetobepaidwhetherthebusinessismakinganysalesornot.TheyarealsoknownasOVERHEADCOSTS.VARIABLECOSTSarecostswhichvarywiththenumberofitemssoldorproduced.TheyareoftencalledDIRECTCOSTSastheycanbedirectlyrelatedtooridentifiedwithaparticularproduct.TOTALCOSTSarefi*edandvariablecostsbined.BREAK-EVENCHARTSaregraphswhichshowhowcostsandrevenuesofabusinesschangewithsales.Theyshowthelevelofsalesthebusinessmustmakeinordertobreakeven.TheREVENUEofabusinessistheineduringaperiodoftimefromthesaleofgoodsorservices.Totalrevenue=Quantitysold×PriceTheBREAK-EVENPOINTisthelevelofsalesatwhichTotalcosts=Totalrevenue.TheCONTRIBUTIONofaproductissellingpricelessvariablecost.DIRECTCOSTSarethosethatcanbedirectlyrelatedtooridentifiedwithaparticularproductordepartment.MARGINALCOSTSarethee*tracostsabusinesswillincurbyproducingonemoreunitofoutput.INDIRECTCOSTSarethosecostswhichcannotbedirectrelatedtoaparticularproduct.TheyareoftentermedOVERHEADSorOVERHEADCOSTS.AVERAGECOSTPERUNITisthetotalcostofproductiondividedbytotaloutput.ECONOMIESOFSCALEarethefactorsthatleadtoareductionofaveragecostsasabusinessincreasesinsize.Purchasingeconomies2.Marketingeconomies3.Financialeconomies

4.

Managerialeconomies5.TechnicaleconomiesDISECONOMIESOFSCALEarethefactorstheleadtoanincreaseinaveragecostsasabusinessgrowsbeyondacertainsize.Poormunication2.LowmoraleFORECASTSarepredictionsofthefuture,fore*ample,likelyfuturechangesinthesizeofthemarket.ATRENDisanunderlyingmovementordirectionofdataovertime,fore*ample,thetrendofsalesdatamaybeincreasing.ALINEOFBESTFITisalinedrawnthroughaseriesofpoints,fore*ample,salesdata,whichbestshowsthetrendofthatdata.Itcanbeusedtoforecastresultsinthefuture.BUDGETSareplansforthefuturecontainingnumericalorfinancialtargets.Unit6BusinesscostsandrevenueFI*EDCOSTSarecostswhichdonotvarywiththenumberofitemssoldorproducedintheshortterm.Theyhavetobepaidwhetherthebusinessismakinganysalesornot.TheyarealsoknownasOVERHEADCOSTS.VARIABLECOSTSarecostswhichvarywiththenumberofitemssoldorproduced.TheyareoftencalledDIRECTCOSTSastheycanbedirectlyrelatedtooridentifiedwithaparticularproduct.TOTALCOSTSarefi*edandvariablecostsbined.BREAK-EVENCHARTSaregraphswhichshowhowcostsandrevenuesofabusinesschangewithsales.Theyshowthelevelofsalesthebusinessmustmakeinordertobreakeven.TheREVENUEofabusinessistheineduringaperiodoftimefromthesaleofgoodsorservices.Totalrevenue=Quantitysold×PriceTheBREAK-EVENPOINTisthelevelofsalesatwhichTotalcosts=Totalrevenue.TheCONTRIBUTIONofaproductissellingpricelessvariablecost.DIRECTCOSTSarethosethatcanbedirectlyrelatedtooridentifiedwithaparticularproductordepartment.MARGINALCOSTSarethee*tracostsabusinesswillincurbyproducingonemoreunitofoutput.INDIRECTCOSTSarethosecostswhichcannotbedirectrelatedtoaparticularproduct.TheyareoftentermedOVERHEADSorOVERHEADCOSTS.AVERAGECOSTPERUNITisthetotalcostofproductiondividedbytotaloutput.ECONOMIESOFSCALEarethefactorsthatleadtoareductionofaveragecostsasabusinessincreasesinsize.Phasingeconomies2.Marketingeconomies3.Financialeconomies

4.

Managerialeconomies5.TechnicaleconomiesDISECONOMIESOFSCALEarethefactorstheleadtoanincreaseinaveragecostsasabusinessgrowsbeyondacertainsize.Poormunication2.LowmoraleFORECASTSarepredictionsofthefuture,fore*ample,likelyfuturechangesinthesizeofthemarket.ATRENDisanunderlyingmovementordirectionofdataovertime,fore*ample,thetrendofsalesdatamaybeincreasing.ALINEOFBESTFITisalinedrawnthroughaseriesofpoints,fore*ample,salesdata,whichbestshowsthetrendofthatdata.Itcanbeusedtoforecastresultsinthefuture.BUDGETSareplansforthefuturecontainingnumericalorfinancialtargets.Unit7BusinessaccountingACCOUNTSarethefinancialrecordsofafirm’stransactions.USERSOFFINALACCOUNT:

Shareholders/Creditors/Government/petitorsTheTRADINGACCOUNTshowshowthegrossprofitofabusinessiscalculated.TheCOSTOFGOODSSOLDisthecostofproducingorbuyinginthegoodsactuallysoldbythebusinessduringatimeperiod.TheSALESREVENUEistheinetoabusinessduringaperiodoftimefromthesaleofgoodsorservices.AGROSSPROFITismadewhensalesrevenueisgreaterthanthecostofgoodssold.

Grossprofit=Salesrevenue–CostofgoodssoldNETPROFITistheprofitmadebyabusinessafterallcostshavebeendeductedfromsalesrevenue.Itiscalculatedbysubtractingoverheadcostsfromgrossprofits.

Netprofit=grossprofit–e*pensesThePROFITANDLOSSACCOUNTshowshowthenetprofitofabusinessandtheretainedprofitofapanyarecalculated.DEPRECIATIONisthefallinthevalueofafi*edassetovertime.AnAPPROPRIATIONACCOUNTisthatpartoftheprofitandlossaccountwhichshowshowtheprofitafterta*isdistributed-eitherasdividendsorkeptinthepanyasretainedprofits.RETAINEDPROFITisthenetprofitreinvestedbackintoapany,afterdeductingta*and