MGTA01H3 Study Guide - Final Guide: Economic System, New Product Development, Financial Intermediary

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Published on 18 Dec 2015
an organized eort to provide the things that people need & wants & willing to
pay for. A business exists in order to satisfy those customer needs & also to make a
1. Organised eorts
2. Provides things that people need & wont
3. Satisfy customer needs
4. Generates revenue from sales
money that 'ows into a business every time it sells a product or service to a
 !money that a business spend, to provide customers with products
"revenues minus expenses
"idea people will give up their time, energy & money only if there is some
incentive for them to do so
#revenues don’t cover expenses and costs
$%&'"provides products and services and may collect revenue but
not intended to make prot; i.e. Places for worship, sport teams, university
%&'organization owned by gov’t
Provide- health, education, safety, security and welfare
(products which are tangible that can be touched
)products are intangible, can’t see or touch
 *owners of the means of production are a class of people who grow wealthy by
exploiting the labours of others; Karl Marx
#*people left to pursue their own self-interest without gov’t interference; Adam
$(basic building blocks that in combination are required to make a
business and product things
1. Natural Resources
2. Labor
3. Capital
4. Entrepreneurship
things found in nature; land, water, wood
Resource Intensive- dependent on natural resources
#people who contribute their eorts to a business
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Labour Intensive- requires large amount of labour for g/s
!money or machines and technologies that money can buy
Capital Intensive- requires lots of money, machines or technology for g/s
,(series of technological developments and inventions (labour
saving) transformed agriculture, mining, etc in the 18th century
)subbing one factor of production for another so products can be
made more quickly or cheaply
!people motivated to take time to incur the costs and risks to make
something happen
!!willingness or motivation to take initiative to accept risk of failure in
return for reward
*study of how people produce the thing they need and wants
What to produce, what to consume, how to produce it, how to share it
Government or
Communism Socialism Mixed Market
Gov’t runs all gov’t leads some gov’t involvement no
gov’t interference
Planned Market
0*individual business owners closer to their customers
Individual business owners can respond quickly to people’s needs
- In Canada businesses and gov’t co-exist
Businesses and the state interact; taxes, laws and regulations, provide g/s
transfer ownership of businesses or industries out of gov’t; i.e. Rolls Royce
and Jaguar
gov’t assumes control of resources, business and industries
Runs them intending to benet the entire nation
,* Canadians pay taxes based on their annual income; tax system is
progressive; distribute largely to services that benet less fortunate
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.!enterprise owned and operated by a gov’t in Canada; federal or
provincial; i.e. LCBO and Hydro One
).(!a gov’t owned organization that provides g/s but don’t seek
0name given to series of laws instituted in the Soviet Union in 1980’s; policies
reserved the economic policies of collectivisation and nationalisation put in place after
Russian revolution
 
Corporate Income Tax- 13% of gov’t revenue; taxes on businesses revenue
Sales Tax- HST-13% taxed on g/s; split 5% to federal and 8% to provincial 11%
of gov’t revenue
Employment Insurance- 2% of individual annual income; helps unemployed
Canadians nancially-8% of gov’t revenue
Canadian Human Rights Act- equal of race, gender, sexual orientation and
Canada Labour Code- minimum wages and limited hour of working
Employment Insurance Act- 52 weeks of maternity or paternity
Consumer Packing and Labelling Act- provide labelling information to help
customers make informed purchasing
0interaction of buyers and sellers exchanging information about products
2&$*!combination of numbers of buyers and sellers in a market;
sometimes called “market structure”
Determines- variety of choice buyer has and negotiating power seller has
/characteristic which makes a business or industry diFcult, time-
consuming or
0)% of individual rm’s sales relative to total sales within a given market
*$)capacity to reduce costs when producing g/s in large quantities
&0particular group of people who share similarities; i.e. age. Gender, location,
income, who buy similar g/s because they have similar needs and wants
/characteristics that makes business or industry diFcult or expensive to
enter, or product diFcult, time consuming or expensive to make
#&(!/business that enjoys exclusive right to sell product or service in
given market because gov’t gave right through passing relevant legislation
23convince potential customers that product is dierent or better than
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