1-The Business Environment and Business Economics

8/13/2019 1-The Business Environment and Business Economics

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The Business Environment

and Business Economics

The Business Environment

and Business Economics

BooksText

Books

1. Microeconomics7theditionbyPindyck,RubinfeldandMehtaPearson

2. EconomicsforBusiness4theditionbySlomanandSutcliffePearson

3. PrinciplesofEconomics4theditionbyN.G.MankiwThomson

TheBusinessEnvironment Whatisbusinesseconomics?

decision

making

in

business

externalinfluencesonthefirm

thebusinessenvironment

internaldecisionsofthefirm

theexternaleffectsofbusinessdecisionmaking

Whatdobusinesseconomistsdo?

description

analysis

recommendations

TheBusinessEnvironmentPolitical/legalfactors

Economic

factors

themicroeconomicenvironment themacroeconomicenvironment

Social/culturalfactorsTechnologicalfactorsPESTanalysis

relationsbetweenthefoursetsoffactors importanceoftheeconomicfactors

PESTELanalysis

IncludesEnvironmentalandLegalfactors


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Q Asfarasapubisconcerned,intermsofaPESTanalysis,anationwidebanonsmokingwouldrepresentachangeinthe

A. Politicalenvironment.

B. Economicenvironment

C. Socialenvironment

D. Technologicalenvironment

E. AandBabove

Q WhichofthefollowingwouldNOTbecountedasaneconomicfactoraffectingafirm?A. Thepricessetbythefirms

competitors.

B. Thecostofrawmaterials.

C. TherateofinterestsetbytheBankofEngland.

D. Arequirementthatthefirmrecognisestradeunions.

E. Achange

in

consumer

tastes.

TheStructureofIndustryImportanceofindustrialstructuretotheperformance

of

firms

Classifyingproduction

primaryproduction(Minerals,Energy,Agriculture)

secondaryproduction(Manufacturing,Construction)

tertiaryproduction(Services)

SharesinGDPandemploymentofthethreesectors

trends

over

time

currentposition

Outputofindustrialsectors(as%ofGDP)Outputofindustrialsectors(as%ofGDP)

1974

54.9%

2.8%

42.3%

2005

Secondary

Primary

Tertiary


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Outputofindustrialsectors(as%ofGDP)Outputofindustrialsectors(as%ofGDP)

1974

54.9%

2.8%

42.3%

73.9%

3.5%

22.6%

2005

Secondary Secondary

Primary Primary

Tertiary Tertiary

19741974

54.7%

3.4%

41.9%

20052005

Secondary

Primary

Tertiary

Employmentbyindustrialsector(%oftotalemployees)Employmentbyindustrialsector(%oftotalemployees)

19741974

54.7%

3.4%

41.9%

82.3%

1.5%

16.3%

20052005

Secondary Secondary

Primary Primary

TertiaryTertiary

Employmentbyindustrialsector(%oftotalemployees)Employmentbyindustrialsector(%oftotalemployees) TheStructureofIndustry

Classifyingfirmsintoindustries

natureofanindustry

industrialsectors

whyclassify

firms

into

industrial

sectors?

helpsinanalysingtrends

identifyingspecificneeds

helpstounderstandrelationshipsbetweenfirms

Standardindustrialclassification(SIC)

natureofthesystemofclassification

sections,subsections

divisions,groups

and

classes


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80

100

120

140

160

180

200

220

240

260

1980 1985 1990 1995 2000 2005

GDPbyindustry(1980=

100)

E

C

A/B

UKGDPbyindustry(1980=100)

80

100

120

140

160

180

200

220

240

260

1980 1985 1990 1995 2000 2005

GDPbyindustry(1980=

100)

E

C

A/B

D

F


80

100

120

140

160

180

200

220

240

260

1980 1985 1990 1995 2000 2005

GDPbyindustry(198

0=100)

I

G/H

E

J-Q

C

A/B

D

F


10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

1980 1985 1990 1995 2000 2005

E

mploymentbyindustry

(1980=100)

UKEmploymentbyindustry(1980=100)


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10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

1980 1985 1990 1995 2000 2005

Employmentbyindustry(1980=100)

E

C

A/B


10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

1980 1985 1990 1995 2000 2005

Employmentbyindustry(1980=100)

E

C

A/B

D

F


10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

1980 1985 1990 1995 2000 2005

E

mploymentbyindustry

(1980=100)

I

G/H

E

J-O

F

C

A/B

D

UKEmploymentbyindustry(1980=100)Q Whichsectorhasseenthefastestrateofgrowthinoutputinrecentyears?A. Primary

B. Secondary

C. Tertiary


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TheStructureofIndustryChangesinthestructureofUKeconomy

expandingand

contracting

sections

byoutput

byemployment

Analysingindustrialstructure


expandingand

contracting

sections

byoutput

byemployment


changesinindustrialconcentration


expandingandcontractingsections

byoutput

byemployment


changesinindustrialconcentration

the

distribution

of

SMEs

in

the

economy

Number of businesses, employment and turnover by indus trial sector (2004)Number of businesses, employment and turnover by indus trial sector (2004)

S ec to r S ize o f en te rp ri se Nu m ber o f en te rp ri ses(and % of sector)

Employment(% of sector)

Turnover(% of sector)

Al l SM Esa

4 276 865 (99.8) 58.5 52.0

Large f i rmsb

5 980 (0.2) 41.5 48.0

A, B SM Es 169 580 (100 ) 100 .0 100 .0

Large f irm s 20 (0.0) 0.0 0.0

D SMEs 330 190 (99.4) 54.0 35.5

Large f irm s 1 855 (0.8) 46.0 64.5

F SMEs 862 310 (100) 82.9 66.1

Large f irm s 305 (0.0) 17.1 33.9

G SMEs 569 895 (99.8) 48.1 49.8

Large f irm s 1 045 (0.2) 51.9 50.2

H SMEs 136 965 (99.8) 55.4 59.6

Large f irm s 310 (0.2) 44.6 40.4

I SMEs 263 850 (99.8) 40.8 40.1

Large f irm s 450 (0.2) 59.2 59.9

J SMEs 69 430 (99.6) 21.0 na

Large f irm s 300 (0.4) 79.0 na

K SMEs 1 011 810 (99.9) 68.1 68.9

Large f irm s 1 100 (0.1) 21.9 20.1

N SMEs 239 935 (99.9) 79.7 86.8

Large f irm s 165 (0.1) 20.3 13.2

O SMEs 476 025 (99.9) 74.1 62.2

Large f irm s 265 (0.1) 25.9 37.8


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Q InwhichsectoristherethehighestratiooflargefirmstoSMEs?A. Primary

B. Secondary

C. Tertiary

TheDeterminantsofBusinessPerformance

Structure

conduct

performance

relationshipbetweenbusinessstructureandbusinessconduct(behaviour)

competitivemarketsandcompetitivebehaviour

limitedcompetitionandcollusion

relationshipbetweenbusinessconductandbusiness

performance

indicatorsformeasuringperformance

profitability,marketshare,growth,etc.

Q TheStructureConductPerformanceparadigmimpliesthatbusinessperformanceisstronglyaffectedbythe

A. aimsofthefirm.

B. competenceofmanagement.

C. internalorganisationofthefirm.

D. degreeofcompetitionthefirmfaces.

E. technologythefirmuses.

TheDeterminantsofBusinessPerformanceInternalaimsandorganisation

profitmaximisationastheprimegoal

othergoals

distinctionbetweenownersandmanagers

importanceofmanagersownobjectives

satisficing


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TheDeterminantsofBusinessPerformance

Other

factors

affecting

performance

internalstructure

information

competenceofmanagement

qualityoftheworkforce

systems informationsystems

motivation

technicalsystems

distributionsystems

financialsystems

1-The Business Environment and Business Economics

Documents

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