Chapter Summary for Final Exam

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Management (MGT)
Chris Bovaird

MGTA03 Chapter Summary for Final Exam 2009 Ch1 Introducing the Contemporary Business World Business organization seeks to earn profit by providing products tangible goods or intangible serviceProfit money that remains after a business expenses money spent in production and running the business are subtracted from its revenues money earned through sale of productsEconomic system way which nation allocates resources among citizens Differ in terms of resource ownership and resource controlThese resources are calledFactors of ProductionLabour human resources and the skills of a workforceCapital financial resources need to start and run an enterpriseNatural Resources all physical resourcesInformation Resources specialized knowledge market forecasts demographics help to achieve business goalsEntrepreneurs accept risks and opportunities manage all other factors of production in the firm Types of Economic systemsCommand Economies centralized government government owns most industries communism government owns all industries socialism only some major industries are controlledMarket Economiesindividuals make decisions about factors of productionmarket mechanism for exchange freedom of choice widely enjoyed Capitalism Political idea with private ownership and encouragement of entrepreneurshipMixedMarket Economies most economic systems elements of both command and market Current trend towards privatization transfer of government activities to public sector because government managed industries are inefficient and deregulation reducing laws that affect business activitiesGovernments influence business as 6 thingsCustomers eg office supplies Military suppliescompetitors eg Crown corporations owned by government compete with private sectorRegulator Protecting Competition eg ensuring healthy competition protecting smaller firms Protecting Consumers eg safety standards warning labels Achieving Social Goals Eg safe workplaces employment insurance Protecting Environment Eg Laws governing emissions and waste Taxation Agent Revenue taxes fund government programs either Progressive higher tax rate for higher incomes or Regressive lower incomes pay higher percentage of income Restrictive taxes to control certain activities Eg alcohol Provider of incentives Eg Subsidies data on Stats Canada export insurance Provider of Essential Services Eg healthcare highways economic stability plans Demand and SupplyDemand willingness and ability for buyer to purchase product law of demand buyer purchases more when price dropsMGTA03 Chapter Summary for Final Exam 2009 1Supply willingness and ability for producer to offer productLaw of Supplysellers offer more more supply when price increasesDemand and Supply Schedule relationships between demand and supply at different price levels Demand curve how many units bought at different pricesSupply curve how many units offered at different pricesMarket price equilibrium price intersection of both curves profit is maximized
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