MGTA03, Lecture 2 Notes, Bovaird, Summer 2012

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Department
Management (MGT)
Course
MGTA01H3
Professor
Mc Conkey& Bovaird
Semester
Summer

Description
LEC02, MGTA03 ------------------------- REMINDER: FSG - 2 sessions every week - right after this class - a) 1pm - 2pm, - b) 2pm - 3pm - IC300 --------------------------- (I took off his intro talk that he gave for around 15 minutes, simply because I think that it was only to promote taking management courses by sharing a story and personal experience, rather than being relevant to course content itself) MGTA03 [1-2, skip] [3] MAIN POINTS OF LAST WEEK'S LECTURE - out of which, he highlighted: factors of production 1. labour 2. natural resources 3. capital 4. entrepreneurs* *textbook did not include entrepreneurs before, likely b/c they were not recognized for their importance. - think of it this way: labour, natural resources and capital do not just suddenly come together to make a business. There needs to be people who take the risks to bring these together, with the intent of making profit. => entreprenurship is a fundamental to economy, critical dimension of the factors of production -------------------------------- [4] MAIN POINTS - of Today's Lecture 1. Economic systems (command vs. market) [5] to [6] 2. Command economies [6] to [8] 3. Market economies [6], [9], [12] --> 3a. Mixed economies (the actual forms of economies we see nowadays in general) [10] to [11] 4. Supply & Demand (law of supply, law of demand, graphing together the two laws, equilibrium) [13] to [14] 5. 4 Degrees of Competition (perfect competition, monopolistic competition, oligopoly, monopoly) [14] to end (in the [ ], I have put the slide corresponding to that point) [5] 1. Economic systems - There is difference from one country to another as to how they answer these essential economic questions: - b/c not everyone exchanges things the same way - ex. some countries encourage bartering (exchange of good for a good) more than the often seen good for cash a) Who should own or control the factors of production? - ie. should it be more or less privatized, or should it be more or less government-owned? b) With the available factors we have, what should be produced? - ie. concerns differ dep. on the factors like supply and demand - ex. should we produce more of such-and-such product b/c demand is high for it? [6] 1. Economic systems ECONOMIC SYSTEMS - 2 TYPES COMMAND ECONOMIES MARKET ECONOMIES - aka "PLANNED ECONOMIES" - assumption is that individuals - central govrnmt of territory or control factors of prod'ion control or region managing and - ex. an entrepreneur controlling those factors of prod'ion - individuals make majority of, or => can be: ALL of the decisions - controlling availability of capital - decisions of >- what to build, where to build a facility (ex. power plant), >- what kind of products should be produced, and in what area , Command and Market Economy >- where must you (the individual) work - are 2 theoretical opposites - theoretical meaning that it is hard to find perfect practical ex's >- how many kinds of labourers, and of one of these "extremes" of how much of each type (ie. it is difficult to find a country (ie. how many medical professionals, that operates COMPLETELY how many engineers, essentially they under a command economy, or are likely to dictate the individual'sCOMPLETELY under a market occupation!) economy) - make ALL or most of economic decisions as to what to do with these factors. [7] 2. Command economies COMMAND (aka PLANNED) ECONOMIES (this slide is just a repeat of the definition) [8] 2. Command economies 2 TYPES - although there aren't any ex's of "perfect" command economy, there are those close to this extreme: --> COMMUNIST --> SOCIALIST ECONOMIES ECONOMIES (ex) Communist - gov. owns & controls majority, but no where nations in the past near all factors of prod'ion - had strong central - makes majority of economic decisions control over decisions, - key industries are under gov. control and have access to
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