week one question reviews.docx

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Department
Management (MGT)
Course
MGTA01H3
Professor
Gordon Cleveland
Semester
Fall

Description
Question 1 1. Business theory suggests that, in order to start a business, you need some combination of labour, capital, raw materials and entrepreneurial spirit. A law firm sells the experience, expertise, and judgment of the lawyers who work there. In a law firm, therefore, the most important factor of production is: Answer entrepreneurial spirit capital labour natural resources 1 points Question 2 1. Mary, the owner of Mary's Variety, decided that she was morally opposed to selling cigarettes. So, she stopped ordering cigarettes from her suppliers. In 2012, the store's total sales were $20,000 less than they had been in 2011. However, she saved $10,000 from not having to buy the cigarettes in the first place. ALL the rest of the store's revenues and expenses were unchanged (she bought and sold the same amount and value of milk, newspapers, and pop, paid the same rent, and paid the same to her part time workers). We can say that, in 2012: Answer "Mary's Variety" was more profitable because it had fewer expenses. "Mary's Variety" had the same profit because both revenues and expenses went down "Mary's Variety" had no profits. In fact it had a loss, because total revenues went down more than total expenses. "Mary's Variety" made a profit, but a smaller one. 1 points Question 3 1. Business theory suggests that, in order to start a business, you need some combination of labour, capital, raw materials and entrepreneurial spirit. When a bank closes a branch, but installs an ATM machine at the same location, what is it doing: Answer demonstrating entrepreneurial spirit substituting natural resources for capital substituting capital for labour spending money on natural reso
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