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Chapter 1

Chapter 1 – Understanding the Canadian Business System.docx


Department
Business Administration
Course Code
BUS 201
Professor
Peter Tingling
Chapter
1

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Chapter 1 – Understanding the Canadian Business System
Business: organization seeking profits by providing g/s
Profit: sales revenue – expenses
Not-for-profit organizations: provides g/s w/o seeking profits
Charities, educational institutions, hospitals, labor unions,
gov. agencies
Business manages must pay attention to:
Competitors’ actions, rapid technological change, new
product development, corporate strategy, stock prices
Economic systems: the way a nation allocates its resources among its citizens
differs in who owns/controls factors of production
Factors of productions: resources used to produce g/s: labor, capital, entrepreneurs, & natural
includes information resources
Labor: mental/physical training & talents of people
Capital: funds to operate an enterprise
personal investments, sale of stock to investors, profits from
sale, fund borrowed from banks
Entrepreneurs: individual who organizes/manages factors of production to produce g/s to earn profit, but
runs risk of failure
Natural resources: items used in natural state land, water, trees, minerals
Information resources: info such as market forecasts, econ data, & specialized knowledge of employees
that is useful to business and helps it achieve goals
Command economy: an economic system in which gov. controls all/most factors of production and makes
all/most production decisions
communism: gov. owns and operates all industries
omost countries abandoned this in favor of more market-
based economy
oeven China/Vietnam/Cuba have market economy elements
socialism: gov. owns/operates main industries, while
individuals own/operate less crucial industries
oa large population of citizens
oextensive public welfare systems have resulted in high taxes
market: an exchange process between buyers and sellers of a particular g/s
e-commerce has B2C(business to consumer) and
B2B(business to business) transactions
othese take place w/o gov. involvement
China amended to permit private enterprise  very
productive
Input market: firms buy resources that they need in production of g/s
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