EE - Economics in Entrepreneurship Overview

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Economics in Entrepreneurship

Have you ever wondered why businesses make the decisions they do? What makes them decide what products to sell? How do they decide on their prices? How do they decide on how many people to employ?

This lesson will explain a lot of this to you. You will learn what goes on behind the scenes in a business person’s mind that makes them decide what to do and how to do it. You will learn how to think like an entrepreneur and how to recognize business opportunities. Who knows? We may see you on Shark Tank someday!

Module Lessons Preview

In this module, we will study the following topics:

Supply and Demand: This lesson will explain the basic economic theories of supply and demand.

Economic Behavior: Learn about the psychology behind the economic decisions we make.

Law of Diminishing Returns: This lesson will explain the economic theory of the Law of Diminishing Marginal Returns.

Entrepreneurial Opportunities: Learn how to recognize the business opportunities that are around us.

Impact of Business Activities: This lesson contains an explanation of how different activities impact financial, human resources, and also risk and strategic management decisions.

Management Style: Students will learn about the four main management styles and be able to identify management styles in others and themselves.

Key Terms

Demand – The total amount of a product that customers are willing to buy

Diminishing Marginal Utility – The decrease of marginal utility that is achieved with each additional unit of a good being consumed

Economic Behavior – The predictable behavior of individuals and businesses in response to markets, prices and competition

Entrepreneurial Opportunity – A potential business that someone could start

Formula – Change in total costs/change in total quantity produced

Management Style - The method a manager uses to manage their business and how they apply to the personal traits of entrepreneurs

Marginal Benefit – The additional (marginal) utility that is received from consuming (or buying) one more unit of a good

Marginal Cost - The additional (marginal) utility that is given up to buy one more unit of a good

Opportunity Cost – The value of the highest alternative opportunity (thing given up to get something)

Supply – The total amount of a product that businesses are willing to produce

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