chapter 1 - Introduction to business administration

Question 1

Define macroeconomy, microeconomy and general/specific business management.

Answer 1

Macroeconomy study of the economy as a whole, including topics such as inflation, economic growth, and unemployment.
Microeconomy individual economic agents such as households, firms, and markets. It deals with topics such as supply and demand, market structures, and consumer behavior.
General business management overall management of a business, including areas such as finance, marketing, and operations.
Specific business management refers to the management of a particular area or function within a business, such as human resources or production

Question 2

What is general principle of rationality and acting economically?

Answer 2

make decisions that maximize benefits and minimize costs.
goal should be achieved with the use of lowest possible resources
assumption: individuals are rational and will make choices that are in their best interest, based on their preferences and the prices of goods and services.

Question 3

In which 2 ways is general principle of rationality formulated?

Answer 3

Technical Maximization of Outputs (fixed inputs, goal to maximize output to produce)
Technical Minimization of Inputs (fixed outputs, goal to minimize input, least possible consumption of production factors)

Question 4

What is value-based transformation?

Answer 4

as good as possible relationship between expenditure and income (general maximization principle) should be achieved

Question 5

Which 2 question should each decision maker ask themselves?

Answer 5

Is our acting economically meaningful?
is it ethically/morally justifiable?

Question 6

Which 3 factors are important when starting a company?

Answer 6

Personal requirements
Financial Requirements
Business idea/concept

Question 7

Product ideas come from market pull and technology push. Describe them.

Answer 7

Technology push – company’s R&D develops new and innovative product which get pushed on market and via advertising need is created
Market pull – company’s sells department notices need on the market which then triggers the process of product development.