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Midterm

MGTA01H3 Study Guide - Midterm Guide: Planned Economy, Economic System, Purchasing Power Parity


Department
Management (MGT)
Course Code
MGTA01H3
Professor
Bill Mc Conkey
Study Guide
Midterm

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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
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