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Canada (162,376)
Commerce (1,696)
Rita Cossa (56)
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Review.docx

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Department
Commerce
Course Code
COMMERCE 1E03
Professor
Rita Cossa

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Commerce 1E03 Chapter 1 Business Any activity that seeks to provide goods and services to others while operating at a profit Profit The amount a business earns above and beyond what it spends for salaries and other expenses Entrepreneur A person who risks time and money to start and manage a business Revenue Total amount of money a business takes in during a given period by selling goods and services Loss When a business’s expenses are more than its revenues Risk The chance an entrepreneur takes f losing time and money on a business that may not prove profitable Companies that take the most risks may make the most profit Stake holders All the people who stand by the policies and activities of a business These include: Investors, Customers, Surrounding Community, Environmentalist, Dealers (retailers), Employees, Government, Suppliers, and Financial Institutions. Offshoring Sourcing parts of the purchased inputs outside of the country Outsourcing Assigning various functions, such as accounting, production, security, maintenance and legal work to outside organizations Non-Profit Organization An organization whose goals do not include making a personal profit for its owners or organizers Two ways to succeed in business: 1) rise up through the ranks of large companies 2) Start your own business and become an entrepreneur Factors of Production: The resources used to create wealth 1. Land (or natural resources) 2. Labour 3. Capital good (this includes machines, tools, buildings, or whatever else is used in the production of goods. It does not include money. Money is used to buy factors of production – it is not a factor itself) 4. Entrepreneurship 5. Knowledge- information technology has revolutionized business, making it possible to quickly determine wants and needs and to respond with desired products. Countries are rich due to a combination of entrepreneurship and the effective use of knowledge Business environment the surrounding factors that either help or hinder the development of business Six elements: 1. The legal and regulatory environment: Tax laws ( also known as acts) , contract laws, elimination of corruption -The Constitution Act defines the powers that can be exercised by the different levels of government -Competition Act: maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy -Regulations: rules or orders made by the government to carry out the purposes set out in statutes -Laws affect businesses, and are put in place to most times benefit the business 2. The economic: Income and expenditures, currency shifts, economic systems The strength of the dollar value 3. The technological: Information and technology, databases, the internet -Technology: inventions or innovations form applied science or engineering research. -Productivity: The amount of output that is generated given the amount of input -effectiveness means producing the desired result -efficiency means producing goods and services using the least amount of resources -e-commerce: The buying and selling of goods and services over the internet -Business to consumer (B2C) – Business to business (B2B) -e-business: Any information system or application that empowers business processes -database: An electronic storage file in which information is kept; one use of databases is to store vast amounts of information about customers -Identity theft: Obtaining personal information about a person and using that information for illegal purposes 4. The competitive: Components of competition, customer-driven, organization structure 3Components of Competition: -Entry (barriers) –Power of buyers and Suppliers – Existing Competitors and Substitutes -Empowerment: Giving front-line workers the responsibility, authority and freedom to respond quickly to customer request 5. The social: Diversity, demographic changes, family changes -demography: statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income -baby boom echo: A demographic group of Canadians that were born from 1980-1995; the children of the baby boomers -baby boomers: A demographic group of Canadians that were born in the period from 1947- 1966 6. The global: The quality imperative, free trade, global competition -Carbon footprint: the impact of human activity measured in term s of carbon dioxide it causes to be emitted into the atmosphere -food miles: the distance travelled from the place where food is produced to the place where it is eaten, considered in the terms of the environmental damage that transporting it entails -green tax: a tax imposed with the intention of discouraging activities that may damage the environment -eco village: A small scale, environment friendly settlement designed for sustainable living Goods: Tangible products such as computers, food, clothing, cars and appliances Services: Intangible products such as education, health care, insurance, recreation, and travel and tourism Chapter 2 Economics The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals Macroeconomics The part of economic study that looks at the operation of a nation’s economy as a whole Microeconomics The part of economic study that looks at the behaviour of people and organizations in particular markets Resource Development The study of how to increase resources and the creation of the conditions that will make better use of those resources (e.g. Recycling) Mari culture: The farming of aquatic plants and animals in land-based tanks and ponds or in sea cages Invisible hand A phrase coined by Adam Smith to describe the process that turns self-directed gain into social and economic benefit for all Capitalism An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit Supply The quantity of products that manufactures or owners are willing to sell at different prices at a specific time Demand The quantity of products that people are willing to buy at different prices at a specific time The equilibrium point the place where quantity demanded and supplied meet Market Price The price determined by supply and demand Perfect Competition The market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product Monopolistic Competition The market situation in which a large number of sellers produce products that are very similar but that are perceived by buyers as different Oligopoly A form of competition in which just a few sellers dominate the market Monopoly A market in which there is only one seller for a product or service Socialism An economic system based on the premise that some, if not most, basic businesses should be owned by the government so that profits can be evenly distributes among the people Communism An economic and political system in which the state make all economic decisions and owns almost all of the major factors of production Free- Market Economy An economy in which the market largely determines what goods and services are produced, who gets them, and how the economy grows Command Economy An economy in which the government largely decides what goods and service are produced, who gets them, and how the economy will grow Mixed Economies Economic system in which some allocation of resources is made by the market and some by the government Gross Domestic Product (GDP) the total value of goods and services produced in a country in a given year Standard of Living The amount of goods and service people can buy with the money they have The Quality of life the general well-being of society in terms of political freedom, a clean natural environment, education, health care, safety, free time, and everything else that leads to satisfaction and joy Productivity The total output of goods and services in a given period divided by the total hours of labour required to provide them Unemployment Rate The percentage of the labour force that actively seeks work but is unable to find work at a given time Types of unemployment: Frictional: those who have quit, or who haven’t found a job yet Structural: caused by restructuring of firms or by a mismatch of skills Cyclical: recession or similar downturn in business cycle (most serious) Seasonal Inflation A general rise in the prices of goods and services Disinflation A situation in which price increases are slowing (the inflation rate is declining) Deflation A situation in which price are declining Stagflation A situation which the economy is slowing but prices are going up regardless Consumer Price Index (CPI) Monthly statistic that measures the pace of inflation or deflation Business Cycles (economic cycles) the periodic rises and falls that occur in economies Four Phases: BRDR 1. Economic boom 2. Recession : two or more consecutive quarters of decline in the GDP, last one in 2008 3. Depression: A severe recession usually accompanied by deflation 4. Recovery, when the economy stabilizes and starts to grow Chapter 3 National Policy Government directive that placed high tariffs on imports from the United States to protect Canadian manufacturing which had higher costs 6 Government activities affect business: Crown Corporations A company that is owned by the federal or provincial government Play an important role in economy sometimes compete with for-profit businesses Example, Air Canada, National Railway, Bank of Canada, electric companies for each province Alberta Heritage Saving Trust Fund, made from the oil boom and it makes investment decisions that will affect Alberta Caisse de depot et placement du Quebec, funds collected by Quebec pension plan Privatization: Process of government selling crown corporations Laws and Regulations these cover a wide range from taxation and consumer protection to environmental controls, working conditions, and labour0management relations BNA ACT/ Constitution Act: ground rules for Canada Laws derived from 4 sources: the Constitution, precedent established by judges, provincial and federal statutes, and federal and provincial administrative agencies. Legislature in each province, Parliament in Ottawa makes law for all Canada, federal power always prevails. 9 Federal government responsibilities: - Trade regulations (interprovincial and international) - Incorporation of federal companies - Taxation (both direct and indirect) - The banking and monetary system - National defense - unemployment - Immigration - Criminal law - Fisheries - Along with aeronautics, shipping, railways, telecommunications and atomic energy Industry Canada is the federal agency Competition act trials: gas companies fixed price in 2008, and google and yahoo Marketing boards: Organizations that control the supply or pricing of certain agricultural products in Canada, often control trade. Does not allow for competition, actually makes Canadians pay more. 11 Provincial Government Responsibilities - Regulation of provincial trade and commerce - Natural resources within their boundaries - Direct taxation for p
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