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MGTA01H3 (583)
Chapter 1

Chapter 1

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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

Introduction to Management Chapter One Business: an organized effort to provide goods or services, to customers, in order to make a profit. Profit: the money that remains after a businesss expenses are subtracted from its revenues. Profit is the fundamental reason for a business to exist. Not all organizations are businesses, ex. Hospitals, universities, churches. They provide services, but not for a profit. Loss: when expenses are greater than revenues. (It cost more money to produce the products and run the business, than the business can generate through sales.) Economics: the study of how businesses and people make choices about: What things to produceconsume How best to produce things How best to distribute wealth The basic economic theory states that There are basic building blocks used to produce anything, we call those building blocks Factors of production. 1. Natural Resources raw materials found in ground, grown from earth, or harvested from nature. Examples include: coal, wheat, water, wood 2. Labour human beings, example workers. 3. Capital money, or machines and technologies that money can buy. Examples Include: computers, phones, hammers, tractors 4. Entrepreneurs the people who assemble and organize the other factors of production, the individuals who make it all happen. Economic systems are countries ex. Canada The way different countries try to answer basic economic questions: Who should own of control the factors of productions? What should be produced, with the available factors? Two types of economic systems www.notesolution.com
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