Textbook Notes (362,796)
Canada (158,054)
Anthropology (530)
ANTA02H3 (143)
Chapter 1

Chapter 1 Intro to Business.docx

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University of Toronto Scarborough
Chris Bovaird

Business: an organised effort to make or sell something to customers, who need or want something in order to make a profit The Fundamental reason for a business to exist is to make a “profit” Profit – revenue – expenses Revenue – The money a business earns selling its product and services Expenses (Costs) – The amount spent running the business Characteristics of Business is to take account of what consumers want or need in order to get demands for the service or goods. Economic System – The way in which a nation distributes its resources among its citizen Factors of production – The resources used to produce goods and services. Key difference between economic systems is how the nation manages the factors of production  Labour (Human resources)– Is the use of mental and physical capabilities (skills) of people  Capital – The funds needed to operate an enterprise, or the machines and technology  Entrepreneurs – An individual who organizes and manages labour, capital, and natural resources to produce goods and services to earn a profit, but who also runs the risk of failure  Natural Resources –Items used in the production of goods and services in their natural state, including land, water, mineral deposits and trees  Information Resources – information such as market forecast, economic data, and specialized knowledge of employees that is useful to a business and that helps it achieve its goals (ex. GQ Magazine) There are two Types of economic systems that manage the factors of production in different ways. Command Economy – An economic system in which the government controls all or most factors of production and makes all or most production decisions. Communism - A type of command economy in which the government owns and operates all industries (North Korea owning 100% or near of the economy) (Far left on the political scale)  Individuals would contribute according to their abilities (not a choice) and receive economic benefits according to their needs. Socialism – A kind of command economy in which the government owns and operates the main industries while individuals own and operate less crucial industries (Cuba owning more than 50% or the government)  Individuals owns like restaurants and clothing stores  Allowed to choose occupation and profession (but mostly working for government) Market Economy – An economic system in which individuals control all or most factors of production and make all or most production decisions through supply and demand Capitalism – A kind of market economy offering private ownership of factors of production and of profits from business activity (0% of government involvement to the economy) (Far right on the Political Scale) Mixed market economies – An economic system with elements of both a command economy and a market economy; in practice, typical of most nations’ economies (less that 50% governed ex. Canada a
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