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Final

Full exam notes, from lectures & textbok

14 Pages
1211 Views

Department
Management (MGT)
Course Code
MGTA01H3
Professor
Chris Bovaird

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Chapter 1
Economics: The Study of how businesses, people make choices about
oWhat things to produce/consume
Business: an organization that provides goods or services, to customers, in order to make a profit.
How best to produce things. How best to distribute wealth. MUST PROVIDE PROFIT
Basic building blocks used to produce anything are called
**Factors of production**
1. Labour
Human beings, i.e workers
2. Natural resources
Raw materials found in the ground, grown from earth, or harvested from nature
Examples: Coal, wheat, water, wood
3. Capital
Money or machines and technologies that money can buy
Examples: Computers, phones, hammers, tractors, snow shovelling
4. Entrepreneurs
The people who assemble and organise the other factors of production, the
individuals who make it all happen
5. (Information resources) not in the four factors of procution
Economic systems: How different countries answer basic economic questions:
Who should own or control the factors of production?
What should be produced, with the factors of production?
Types of economies: (Command & Market)
Command economies
oCountries where:
oThe government owns/controls most of the factors of production.
oThe government makes most economic decisions.
Market economies
Capitalist Economies:
oIndividuals owns/control all factors of production
oIndividuals make 100% of economic decisions
oExamples: none
Mixed Market Economies:
www.notesolution.com
oIndividuals own/controls majority of factors
oIndividuals make most of economic decisions
oGovernments regulate and tax, run some business
oExample: Canada, USA, UK, France
4 Degrees of Competition:
1. Perfect
Lots and lots of suppliers
All are small
More or less the same
Must sell at the same price
Example: carton of milk
2. Monopolistic Comp.
Lots and lots of suppliers
Most are small
Most more or less the same
Some are big, can differentiate themselves
Most sell at the same price
Big suppliers can charge extra
Example: coffee shops vs. Starbucks
3. Oligopoly
Small number of suppliers (4 or 5)
All are "large"
Each tries to differentiate itself
Industry hard to enter, hard to exit
They watch each other closely
Example: Canadian banking industry
4. Monopoly
Only one supplier
(By definition) 100% market share
Can set whatever price it likes
Example: LCBO
_____________________________________________________________________________________
Chapter 2 (Understanding the Environment of Business)
GDP:
Gross Domestic Product (GDP): $ value of all goods and services produced in a country in
1year
Growing GDP: more people making more stuff.
Falling GDP: fewer people making less stuff. Falling GDP: called recession”
GDP/Capita = relative wealth (per capita means per person)
www.notesolution.com
Productivity:
ability to make things quickly and efficiently
ratio of inputs (time, $$$) outputs (products/services)
how many man-hours, $$ or tons of natural resources does it take to make stuff?
Unemployment
Labour (a key factor of production) is under-utilised.
Unemployment: People would like to work - but can't find work.
The unemployed are people who are actively looking for work
Inflation
Prices for goods going up
People can afford to buy less.
Hurts people on fixed incomes (pensioners)
Suggests: shortages of things people want
Chapter 3
Approximately 2.4 million businesses in Canada
Canada is a market economy
oTherefore anyone may start a business without fees, or government permission
Easy to start a small business and easy for a small business to fail.
To be incorporated in the registry a business must have
oAt least 1 employee
oAnnual Sales revenues of at least $30,000 or be incorporated
Small Business: (An owner-managed business with less than 100 employees)
oScale / Importance in Canada:
The majority of businesses are small businesses (<100 employers)
Annual contribution has been scaled at 25%
Failure and Success:
% that fail % that fail
Year (Canada) (USA)
2 39 40
5 64 60
10 80 90
New Venture/Firm: A recently formed commercial organization that produces goods/services for sale
Entrepreneurs: (People who recognize and seize opportunities) are Internals
oRecognize opportunities
oAssemble and mobilize resources
oAre self-Confident
oRisk tolerance-- assume risks to realize rewards
oRisk intolerance: New or previously unknown situations seen as threatening
oRisk Tolerance People see new or previously unknown situations as desirable
oHigh “Need for Achievement
o“Needs MotivationTheory (Three Basic Human Motivations)
1. Need for power (N-Pow)need to lead
2. Need for affiliation (N-Aff)need friendly relationships and interactions
with others, and need to be liked and held in high regard. Team players.
www.notesolution.com

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Description
Chapter 1 Economics: The Study of how businesses, people make choices about o What things to produceconsume Business: an organization that provides goods or services, to customers, in order to make a profit. How best to produce things. How best to distribute wealth. MUST PROVIDE PROFIT Basic building blocks used to produce anything are called **Factors of production** 1. Labour Human beings, i.e workers 2. Natural resources Raw materials found in the ground, grown from earth, or harvested from nature Examples: Coal, wheat, water, wood 3. Capital Money or machines and technologies that money can buy Examples: Computers, phones, hammers, tractors, snow shovelling 4. Entrepreneurs The people who assemble and organise the other factors of production, the individuals who make it all happen 5. (Information resources) not in the four factors of procution Economic systems: How different countries answer basic economic questions: Who should own or control the factors of production? What should be produced, with the factors of production? Types of economies: (Command & Market) Command economies o Countries where: o The government ownscontrols most of the factors of production. o The government makes most economic decisions. Market economies Capitalist Economies: o Individuals ownscontrol all factors of production o Individuals make 100% of economic decisions o Examples: none Mixed Market Economies: www.notesolution.com o Individuals owncontrols majority of factors o Individuals make most of economic decisions o Governments regulate and tax, run some business o Example: Canada, USA, UK, France 4 Degrees of Competition: 1. Perfect Lots and lots of suppliers All are small More or less the same Must sell at the same price Example: carton of milk 2. Monopolistic Comp. Lots and lots of suppliers Most are small Most more or less the same Some are big, can differentiate themselves Most sell at the same price Big suppliers can charge extra Example: coffee shops vs. Starbucks 3. Oligopoly Small number of suppliers (4 or 5) All are large Each tries to differentiate itself Industry hard to enter, hard to exit They watch each other closely Example: Canadian banking industry 4. Monopoly Only one supplier (By definition) 100% market share Can set whatever price it likes Example: LCBO _____________________________________________________________________________________ Chapter 2 (Understanding the Environment of Business) GDP: Gross Domestic Product (GDP): $ value of all goods and services produced in a country in 1year Growing GDP: more people making more stuff. Falling GDP: fewer people making less stuff. Falling GDP: called recession GDPCapita = relative wealth (per capita means per person) www.notesolution.com
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