The five factors of production are land, labor, capital, entrepreneurship and knowledge.
Land is the total materials available and labor consists of the human resources such as employees, while entrepreneurship entails the management skills and practices. On the other hand knowledge encompasses the use of technical skills such as modern technology. Entrepreneurship is the most important factor of production, because it can easily enable an entrepreneur to acquire the rest four factors.
Demand curve is the connection between the price of the good and the quantity of that good that the consumer is willing and able to purchase in a specified period, provided that tastes, income, prices of related goods, expectations, and number of buyers remain constant. On the other hand, the supply curve is the relationship between the price of the good and the quantity that the seller is willing to and able to sell in a specified period, depending on price, number of competitors, technology, expectations, and cost of raw materials, while the equilibrium price is the point where the quantity demanded equals the quantity supplied.
According to Keller (2011), GDP is the measure of a country’s economic output. He notes that it is the monetary value assigned to all finished goods and services produced within a country in a specific period, usually a year. Real Gross Domestic Product is a measure adjusted by the inflation that reflects the value of all services and goods produced throughout a given year in relation to base-year prices, commonly known as constant-price, constant dollar GDP in economic circles or inflation-corrected GDP. On other hand inflation is the increase in the common level of prices of goods and services in an economy within a specified period (Keller, 2011). An example is a case where a shortage in the supply of oil on the world market leads to the increase in the price of oil, making the consumers of gas resort to other means in order to reduce their use of oil by using other means like bicycles to work in an attempt to reduce the demand and, thus, increase the supply.
Any organization’s most important stakeholders are employees since they possess the knowledge to drive it. On the other hand, the four major areas of social responsibility which should be of great concern to any business include; the responsibility towards customers where the welfare of the customers is taken care of, the government responsibility, which involves the adherence to rules and regulations of doing business, the environmental responsibility, which encompasses the care for the community and the environment in which the business operates, and finally the employee responsibility, which entails the medical, housing and transport affairs of the employees.
However, the most important is the customer responsibility because it provides the means to care for all other social responsibilities. When the customers are not satisfied with the goods or services, they may withdraw their customary and the business will suffer losses.
The specific ethical and social responsibility issue would be that of providing employees with proper healthcare and housing facilities. My personal code of ethics might clash with the operation of other companies because some companies may consider this as a private issue not falling within their mandate. I can try overcoming these differences by providing the knowledge in the private sector on their social responsibility towards the welfare of their employees.
The key components of any business plan include; an executive summary which entails business timetable and finance, the statement of purpose for the plan which is basically the team and structure to roll out the business, the objectives and academic/training rationale, which gives the information for validating the business, and the description of the market structure. Other key components are the results of the competition and feasibility study, which clearly show the name of the competitors and researches to justify it, strengths and weaknesses, which are normally contained in the SWOT analysis, and marketing mechanisms, which include various measures to sensitize the target market. A business plan is important because it lays the fountain as a blue print for a start up business and provides guidelines and direction as well as helps to attract capital to the business through sponsors.
I would prefer to buy an existing business than to start my business from scratch other, because this would make it easier for me to identify and freely control the already existing mechanisms with new management. In this case, the privately held corporation is preferable because it gives the management easier time to make decisions.
One basic form of non-corporate business is the sole proprietorship. It is advantageous, because the decision making is faster as one does not need to consult any other person. However, it is engaging as one has to be present for the business to run. Another basic form of non-corporate business is the partnership. It allows the partners to pool their resources and skills together. However, it can easily be terminated with minor disagreements in decision making.
The six types of corporations include; the proprietary companies which are corporations prohibited from seeking public investment, companies limited by shares in which members have shareholders whose liability is limited to the nominal value held, and companies limited by guarantee which are non-share capital corporations that depend on the guarantee of its members.
The others include liability free companies which is basically reserved to mining and resource companies with share capital, the un-limited liability companies that are corporations, in which members have no limit on individual liability to contribute in case of a debt by the company, and the public companies, which are companies owned by the public and normally have a minimum of three directors. Amongst all these, a company limited by shares is preferable, because the interests of shareholders are limited to the shares held in the company.