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Chapter 1

COMMERCE 1B03 Chapter 1: Chapter 1.docx

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Chapter 1 - Taking risks and making profits within the dynamic business environment
goods - tangible products such as computers, food, clothing, cars and appliances
services - intangible products (products that can't be held in your hand) such as education,
health care, insurance, recreation, and travel & tourism
business - any activity that seeks to provide goods and services to others while operating at a
entrepreneur - a person who risks time and money to start and manage a business
revenue - the total amount of money that is received during a given period for goods sold,
services rendered, and other financial services
profit - the amount of a business earns above and beyond what it spends for salaries and other
loss - when a business's expenses are more than its revenues
bankruptcy - refers to the liquidation of the business debtor's assets and the end of the
commercial entity's operations
risk - refers to the chance of loss, the degree of probability of loss, and the amount of possible
loss (ie. time and money)
it is the chance an entrepreneur takes of losing time and money on a business that may
not prove profitable
starting a business can be a huge risk, but huge risks can result in huge profits
as a potential business owner, you need to do research to find the right balance between the
risk and profit for you
you must calculate the risks and the potential rewards of each decision
businesses and their employees pay taxes to the different levels of government (federal,
provincial, municipal)
this money is used to build hospitals, schools, libraries, playgrounds, roads and other
public facilities
taxes also help to keep the environment clean, support people in need and provide
police and fire protection
a country's businesses are part of an economic system that contributes to the standard of living
and quality of life for everyone in the country
standard of living - the amount of goods and services people can buy with the money they have
Canada has one of the highest standards of living in the world (partially because of its wealth
created by businesses
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