Class Notes (1,200,000)
CA (650,000)
UTSC (30,000)
MGT (300)
MGTA01H3 (400)
Lecture

A Business Defined, Economic Systems, Degrees of Competition


Department
Management (MGT)
Course Code
MGTA01H3
Professor
Chris Bovaird

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Chapter 1 t Understanding the Canadian Business System
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o An organization that provides goods/services to customers in order to make a profit
o Not all organization are businesses t e.g. hospitals, universities, churches t these are services
- Profit and loss
o Profit: the difference between money in (revenue/sales) and money out (costs/expenses)
o Profit is the fundamental reason for a business to exist
o Loss: when expenses are greater than revenues
When it costs more money to produce the products and run the business than the
business can generate through sales t e.g. Air Canada, GM
- Economics: the study of how businesses and people make choices about:
o What things to produce/consume
o How to produce things in the most efficient way
o How to best distribute wealth among employees/employers
- Basic Economics theory
o There are basic building blocks used to produce anything t ZooZ^(}}(
produc]}v_
- Factors of production
1. Natural Resources
Raw materials found in ground, grown from earth, or harvested from nature
E.g. coal, wheat, water, wood
2. Labour
A thriving workforce
E.g. human beings (workers)
3. Capital
Money/machines/technology that money can buy to further the development of a
business
E.g. computers, phones, hammers, tractors
4. Entrepreneurs
The people who assemble and organize the other factors of production t the individuals
who make it all happen
Chapter 1 t Understanding the Canadian Economy - Economic Systems
Economic Systems
- Who should own/control the factors of production?
- What should be produced, with what factors of production?
- Countries differ as to how central the government is in running an economy
o Communism t left wing (North Korea) (Government 100%)
o Socialism t moderate left wing (Cuba)
o Mixed t moderate right wing (Canada)
o Capitalism t right wing (None) (Individuals 100%)
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