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Canada (161,454)
MGTA01H3 (583)
Chapter 1

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Management (MGT)
Chris Bovaird

Chapter 1 – Understanding the Canadian Business System Lecture 2 – Sept 16 Business: organization that sells goods and services for profit - Profit: expenses – revenue (monies spent to produce goods - monies earned) * key reason for businesses to exist; however not all orgs. Are businesses (i.e.univeristy) - Loss: expenses are more than sales; costs more to produce the products & run business than the profit - Business taxes help support the government Economics: study of how businesses, people make choices about what to produce/consume, how best to produce things, and how best to distribute wealth. Economic System: way in which a nation allocates its resources among citizens Factors of production (FOP): basic resources used to produce goods - way FOP are managed is what differentiates economic systems Labour (Human resources): people who work Capital: funds needed to operate an enterprise Entrepreneurs: people who accept the risks involved in creating and maintaining a business Natural Resources: raw materials used to produce goods Information Resources: knowledge that is purchased and used to help a business Market: mechanism for exchange between buyers & sellers 2 types of economic system: Command & Market Command Economy: an economy in which centralized government controls most of production, allocation & FOP. There are 2 types of command economy: communism & socialism - Communism: government controls/owns all industries; makes all decisions - Socialism: government controls/owns only major industries; makes most decisions Market Economy: producers & consumers control production, allocation & FOP through supply & demand. There are 2 types of market economy: capitalism & mixed market economy: - Capitalism: offers private ownership of FOP & of profits from business; individuals owns/controls all factors of production; individuals make 100% of economic decisions - Mixed Market Economy: economic system with both command & market qualities; individuals own/control most of FOP; make most economic decisions Lecture 3 - Sept 23 - Canada: “Mixed” Market Economy - Majority of factors (farmland, forests, mines) owned by private individuals - Most decisions about factors (how many workers to hire, how much to pay them, how much technology to buy) made by individuals - Government does intervene and is involved in the economy (through taxation, regulation, provides some services) Privatization: convert government enterprise into privately owned companies Deregulation: reduction in number of laws affecting business activities& government enforcement How Government Influences Businesses - Government as a customer: buys thousands of products/services - Government as competitor: competes through crown corporations - Government as a regulator: regulates aspects such as administrative & decisions - Government as taxation agent: - Revenue taxes (ie. Income tax) funds government servic
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