MGTA01H3 Chapter Notes - Chapter 2: Industrial Revolution
●Businesses are made up of a small number of fundamental parts
○Natural Resources
○Labour
○Capital
○Entrepreneurship
●Natural Resources
○Things found in nature. Resources that grow out of the earth or can be extracted
from it
○People need and are willing to pay for them
○Businesses whose activities are predominantly dependent on the production or use
of natural resources are sometimes called “resource intensive”
●Labour
○The people who contribute their efforts to a business
○A business that employs many people is sometimes called “labour intensive”
■A business or a process that requires a large amount of labour to produce
its goods or services
●Capital
○Money, or the machines and technologies that money can buy
○A business that requires a great deal of money is called “capital intensive”
■A business or process that requires a large amount of money, machines or
technology to produce its goods or services
●No businesses can exist without some combination of the above
●Replacing people with machines
○Industrial revolution
■A series of technological developments and inventions (many of them
labour saving) that transformed the manufacturing, agriculture, mining,
and transportation industries in the 18th century
○The phenomenon of replacing human works with faster, more efficient machines
is called factor substitution
■Substituting one factor of production (for example, capital) for another
(for example, labour) so that products can be made more quickly or
cheaply
●Entrepreneurship
○The willingness or motivation to take initiative, and to accept the risk of failure in
return for suitable gratification or reward
○Until a few decades ago, there used to only be three factors of production
○Entrepreneurs
■People who form a business who are motivated to take the time, to incur
the costs and risks, and make the effort to make something happen
○Enterprise
■A project or undertaking that requires energy and effort whose outcome is
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Document Summary
Businesses are made up of a small number of fundamental parts. Resources that grow out of the earth or can be extracted from it. People need and are willing to pay for them. Businesses whose activities are predominantly dependent on the production or use of natural resources are sometimes called resource intensive . The people who contribute their efforts to a business. A business that employs many people is sometimes called labour intensive . A business or a process that requires a large amount of labour to produce its goods or services. Money, or the machines and technologies that money can buy. A business that requires a great deal of money is called capital intensive . A business or process that requires a large amount of money, machines or technology to produce its goods or services. No businesses can exist without some combination of the above.
