MGTA Test Review.docx

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Department
Management (MGT)
Course
MGTA01H3
Professor
Bill Mc Conkey
Semester
Fall

Description
MGTA Test Review Business - an organization that seeks to earn profits by providing goods and services. Profit - the money that remains after a business’s expenses are subtracted from its revenues Expenses - the money a business spends producing its goods and services and generally running the business Revenues - the money a business earns selling its product and services Economic system – the way in which a nation allocates its resources among its citizens Factors of production – the resources used to produce goods and services: labour, capital, natural, entrepreneurs Labour – the mental and physical training and talents of people also referred to as human resources Capital – the funds needed to operate an enterprise Entrepreneur – an individual who organizes and manages the factors of production in order to produce goods and services. Run the risk of failure Natural resources – items used in the production of goods and services in their natural state, including land, water, mineral deposits, and trees Information resources – information such as market forecasts, economic data, etc. that is useful to a business Command Economy - an economic system in which government controls or most factors of production and makes all or most production decisions Market economy – an economic system in which individuals control all or most factors of production and make all or most production decisions Communism – a type of command economy in which the government owns and operates all industries Socialism – a kind of command economy in which the government owns and operates the main industries, while individuals own and operate less crucial industries Market – a mechanism for exchange between buyers and sellers of a particular good or service Capitalism – a kind of market economy offering private ownership of the factors of production and of profits from business activity Mixed market economy – an economic system with elements of both a command economy and a market economy most nations follow this practice Privatization – the transfer of activities from the government to the public sector Deregulation – a reduction in the number of laws affecting business activity Revenue taxes – taxes whose main purpose is to fund government services and programs Progressive revenue tax – taxes levied at a higher rate on higher in taxpayers at a lower rate on lower income tax payers Regressive revenue tax – taxes that cause poorer people to pay a huger percentage of their income then the richer pay. However the tax rate itself remains the same. Restrictive Taxes – taxes levied to control certain activates that legislators believe should be controlled Demand – the willingness and ability of buyers to purchase a product or service Supply – the willingness and ability of producers to offer a good or service for sale. Law of demand – the principle that buyers will purchase more of a product as price drops Law of supply – the principle that producers will offer more of a product as price rises Private enterprise – an economic system characterized by private property right, freedom of choice, profits and competition External environment – everything outside and organizations boundaries the might affect it Economic environment – conditions of the economic system in which an organization operates
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