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Lecture 2

MGTA01H3 Lecture Notes - Lecture 2: Planned Economy, Monopolistic Competition, Perfect Competition


Department
Management (MGT)
Course Code
MGTA01H3
Professor
Mc Conkey& Bovaird
Lecture
2

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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
--------------------------------

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[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?

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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"
- central govrnmt of territory or
control or region managing and
controlling those factors of prod'ion
=> can be:
- 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 ,
- assumption is that individuals
control factors of prod'ion
- ex. an entrepreneur
- individuals make majority of, or
ALL of the decisions
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