CUAUTSC_MGTA03_Notes_Ch.1~4 - Ch.1 Introducing the...

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Ch.1: Introducing the Contemporary Business World ~Provided to You by Education of CUAUTSC Business: organization seeks to earn profit by providing products (tangible goods or intangible service) Profit: money that remains after a business' expenses (money spent in production and running the business) are subtracted from its revenues (money earned through sale of products). Economic system: way which nation allocates resources among citizens. Differ in terms of resource ownership and resource control T hese resources are called “ Factors of Production” Labour (human resources) and the skills of a workforce Capital (financial resources) need to start and run an enterprise Natural Resources: all physical resources Information Resources (specialized knowledge): market forecasts, demographics, help to achieve business goals Entrepreneurs accept risks and opportunities; manage all other factors of production in the firm Types of Economic systems: Command Economies (centralized government, government owns most industries), “communism? (government owns all industries), socialism (only some major industries are controlled) Market Economies ( individuals make decisions about factors of production): “ market” ( mechanism for exchange), freedom of choice widely enjoyed Capitalism: Political idea with private ownership and encouragement of entrepreneurship Mixed-Market Economies: most economic systems, elements of both command and market. Current trend towards “privatization (transfer of government activities to public sector because government0managed industries are inefficient) and deregulation (reducing laws that affect business activities). Governments influence business as 6 things: Customers (e.g.: office supplies. Military supplies) competitors (e.g. Crown corporations owned by government compete with private sector) Regulator: Protecting Competition: e.g.: ensuring healthy competition,
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protecting smaller firms Protecting Consumers: e.g.: safety standards, warning labels Achieving Social Goals: E.g.: safe workplaces, employment insurance Protecting Environment: E.g.: Laws governing emissions and waste Taxation Agent: Revenue taxes fund government programs, either Progressive (higher tax rate for higher incomes) or Regressive (lower incomes pay higher percentage of income). Restrictive taxes to control certain activities (E.g.: alcohol) Provider of incentives: E.g.: Subsidies, data on Stats Canada, export insurance Provider of Essential Services: E.g.: healthcare, highways, economic stability plans Demand and Supply Demand: willingness and ability for buyer to purchase product law of demand: buyer purchases more when price drops Supply: willingness and ability for producer to offer product Law of Supply : sellers offer more (more supply) when price increases Demand and Supply Schedule” relationships between demand and supply at
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This note was uploaded on 06/18/2011 for the course MGT a03 taught by Professor Bovaird during the Spring '11 term at University of Toronto.

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CUAUTSC_MGTA03_Notes_Ch.1~4 - Ch.1 Introducing the...

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