Lecture 1- Chapter 1
- Definition: An organised effort to make or sell something, to sell to customers, who need or
want something, in order to make a profit.
- Someone has to put time effort and energy into it.
- Businesses deliver or supply something that people need or want.
- Businesses try to sell those needs or wants to customers.
- Business produce revenue o sales.
- Customers get something in return for their money.
- Businesses sell something that cost them money ex. Pizza. This is called cost.
- They want the money coming in to be more than the cost. This is called profit.
- It is why a business exists.
- Not all organizations are business ex. Hospitals universities, and churches.
- They provide services but not intended for profit.
- Uoft is a not for profit organization, we only pay for 30% of the actual cost.
- Not for profit organization call a profit a “surplus”.
- Businesses are set up intending to make a profit. When it cost more than revenue it’s called a
Lecture 2- Chapter 1
Factors of production:
- Businesses are made up of small essential building blocks. This is called the factors of
4 factors of production:
1. Natural resources- anything that you find in the earth. Things you can harvest from nature.
Ex. Coal, water, wheat. First business in history was agriculture. Most basic and richest
industry in the world profit from agriculture. Oil industry is the richest industry in the world.
2. Labour: can’t have a business without people. Labour intensive businesses need lots of
people to work. Ex. Walmart.
3. Capital: money or the machine or tech your money can buy. Every business needs start-up
money, then they buy stuff to invest in and use for the business.
4. Entrepreneurship: People who assemble and organize the other factors of production. In the
west it’s not the government that makes things work well its people who are dedicated and
have ambition. It’s a character trait, and a culture that encourages this characte