CHAPTER 2 – Understanding
Economics and How It Affects
Business
Economics – The study of how
society choose to employ resources to
produce good and service and
distribute them for consumption
among various group and individual.
Microeconomics – looks at behavior
of individual people and business in
market for particular good and
services
Macroeconomics – looks at the
operation of a nation’s economy as a
whole.
– Freedom was vital to survival
of any economy (to own a land
or property or to keep the
profits)
– People will work if they have
INCENTIVES ( they know will
be rewarded, as a result of their
effort)
HOW BUSINESS BENEFIT
THE COMMUNTIY
“INVISIBLE HAND”
: The process that turn self directed
gain into social and economic
benefits for all
