MGTA01H3- Final Exam Guide - Comprehensive Notes for the exam ( 56 pages long!)

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28 Mar 2018
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UTSC
MGTA01H3
Final EXAM
STUDY GUIDE
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Chapter 1- Business (Lecture)
A business collects revenue and disperses something called expenses
Businesses attempt to make a profit
At times a business loses money, that is called a loss
Profit motive: desire to be rich
A business is an organised effort, to create or provide something, that people want and will pay
for in order to make a profit
- Eg. Apple, Nestle (water), Dell, lemonade stand, Tim Horton are all examples of a business
An organization: and organised effort; involved planning, brainstorming, thought, and at time
some money
The vast majority of the Canadian business employs less than 10 people
Customers are willing to pay for something they want and need.
Business attempt to generate revenue
Revenue: the money that comes in
Expenses: the cost of the product; what it costs the business to provide the product to the
customer
Revenue: money comes in
Expenses/cost: money comes out (eg. Rent, electricity fee, etc)
Profit is the difference between the revenue and expense
- Profit = revenue expense
- Profit- when a revenue is more than the cost
When the revenue is more than the expense, than a business become wealthier
Not all organizations are business
- Eg. Hospitals, universities, religious organizations are organizations
Not- for- Profit organization: organizations that are not intended to make profit
- Intention for the organization
A business tries to make a profit. But churches and universities do not as they are non-profit
organization
The reason why universities are not a profit as it’s intended for organization and is a public
service.
The Profit Motive: The idea that people will give up their time and money only if there is an
incentive to do so
- Eg. People start a business with the purpose to provide for the family and are willing to work
like Rogers. Therefore money is just an incentive.
- Eg. People start a business with the purpose to make a lot of money
Adam Smith agrees with this idea but Karl Marx did not agree with the idea of Profit Motive
- This argument has been going on for years
- Two of the most famous man in the history of the word
Adam Smith:
- Professor of moral philosophy at Edinburgh University
- Belief that it is okay to make a profit if you work and try hard, no matter the profit
- liealis talks aout this i his ook the Wealth of Natio in 1776
- Liberalism also referred to capitalism
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- “oe outies ae osideed a apitalist out, folloig the idea of Ada “ith’s
belief
- Liberalism: people will work hard if let alone to provide for themselves and their families.
- Individuals, and the nation, will prosper if the government leaves them to do so.
Karl Marx:
- Professor and economist
- The idea of making something for 10 dollars and selling it for 50 dollars is the idea of greed
- Mais talks aout this i his ook the Capital i 1
- Believed that profit is the exploitation and the idea of greed
- Communism/Marxism: Profit is the result of one group of people exploiting the labour of
others. The government should oversee the equal distribution of goods and services
This two big ideas were 2 the most important ideas in the 20th century that opposed each
other. Some countries become a liberalism.
“olet Uio, the epuli of Chia tied Ma’s idea of ouis did’t uite ok out?
Canada, USA, France, Italy, Germany, Japa, Uited Kigdo tied “ith’s idea of liealis.
Canada is notionally a liberal economy
Business try to make a profit but businesses can and do make losses
Advantage of liberalism is that anyone can start a business, no matter if your business does not
make a lot of profit. That is good as it balances from the rest of the business that do make a lot
of profit
Some business such as Amazon lost a lot of profit from 1995 to 2003. After 2003, it started to
generate a lot of profit again, making it one of the most successful businesses in the world.
Businesses are difficult to run and are complicated as customers are unpredictable. Running a
usiess euies ou to take isk, theefoe usiess ust atiipate the ustoe’s eeds.
Chapter 1- Business (Notes)
Business: an organised effort to provide the things that people need and want, and are willing to
pay for. A business exists in order to satisfy those customer needs, and also make a profit
… ogaized effot:
- One or more people has to have an idea, and has to put in the time, thought, and effort, into
carrying out the idea
- Business are created as the result of time, effort, and energy of the people who start them
and run them
- Eg. tutoring
... provides things that people need and want:
- Must satisfy the need of the customer
… ust t to satisf ustoe’s eeds:
- Businesses would not exist without customers
- Customers: the people who need or want, and are willing to pay for, the things that a
business provides
- Some customers are referred to as clients
- Clients: commonly referred to as people who use the service of a professional eg. Lawyer,
accountant, architect
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Document Summary

Profit- when a revenue is more than the cost: when the revenue is more than the expense, than a business become wealthier, not all organizations are business. Hospitals, universities, religious organizations are organizations: not- for- profit organization: organizations that are not intended to make profit. Intention for the organization: a business tries to make a profit. People start a business with the purpose to provide for the family and are willing to work like rogers. People start a business with the purpose to make a lot of money: adam smith agrees with this idea but karl marx did not agree with the idea of profit motive. This argument has been going on for years. Two of the most famous man in the history of the word: adam smith: Belief that it is okay to make a profit if you work and try hard, no matter the profit (cid:862)li(cid:271)e(cid:396)alis(cid:373)(cid:863) talks a(cid:271)out this i(cid:374) his (cid:271)ook the (cid:862)wealth of natio(cid:374)(cid:863) in 1776.

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