MGEB06H3 Lecture Notes - Planned Economy

12 views2 pages
Published on 15 Apr 2013
School
Course
Professor
Page:
of 2
Sept 19. 2010
Page 1-9
The Concept of Business and Profit (pg.5)
Business: An organization that seeks to earn profits by providing goods and services
Profit: The money that remains (if any) after a business’s expenses are subtracted from its revenues
Expenses: The money a business spends producing its goods and services and generally running the
business. (Also refer as costs)
Revenues: The money business earns selling products and services. (Also refer to as sales)
Economic Systems around the World (pg. 5-9)
Economic System: The way in which a nation allocates its resources among its citizens
Factors of production: The resources used to produce goods and services: labour, capital, entrepreneurs
and natural resources
Labour: The mental and physical training and talents of people; sometimes called human resources
Capital: The funds needed to operate an enterprise
Entrepreneur: An individual who organizes and manages labour, capital, and natural resources to
produce goods and services to earn a profit, but who also runs the risk of failure
Natural Resources: Items used in the production of goods and services in their natural state, including
land, water, mineral deposits and trees
Information Resources: Information such as market forecasts, economic data, and specialized
knowledge of employees that is useful to a business and that helps it achieve its goals
Command Economy: An economic system in which government controls all of most factors of
production that makes all or most production decisions
Market Economy: An economic system in which individuals controls all or most factors of production
and make all or most production decisions
Communism: A type of command economy in which the government owns and operates all industries
Socialism: A kind of command economy in which the government owns and operates the main
industries, while individuals own and operate less crucial industries
Market: A mechanism for exchange between the buyers and sellers of a particular good or services
Capitalism: A kind of market economy offering private ownership of the factors of production and of
profits from business activity
Mixed Market Economy: An economic system with elements of both a command economy and a
market economy; in practice, a typical of most nations economies
Privatization: The transfer of activates from the government to the public sector
Deregulation: A reduction in the number of laws affecting business activity

Document Summary

Business: an organization that seeks to earn profits by providing goods and services. Profit: the money that remains (if any) after a business s expenses are subtracted from its revenues. Expenses: the money a business spends producing its goods and services and generally running the business. (also refer as costs) Revenues: the money business earns selling products and services. (also refer to as sales) Economic system: the way in which a nation allocates its resources among its citizens. Factors of production: the resources used to produce goods and services: labour, capital, entrepreneurs and natural resources. Labour: the mental and physical training and talents of people; sometimes called human resources. Capital: the funds needed to operate an enterprise. Entrepreneur: an individual who organizes and manages labour, capital, and natural resources to produce goods and services to earn a profit, but who also runs the risk of failure.