Textbook Notes (363,229)
Canada (158,274)
MGTA01H3 (583)

Chapter no. 1 & 2

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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

Business Chapter 1 Understanding the Canadian Business System 4 Basic factors of production -labour, capital (revenue, investments), entrepreneurs, natural resources -Information resources are also very critical -Command: The government has more control over small business in communism rather than socialism. -Market: Either Capitalist or Mixed. -Revenue taxes: progressive (tax the rich) or regressive (tax the poor) -law of: demand (people buy more when prices are lower), supply (business provide more when prices are higher) -intersection of demand curve (price vs demand) and supply curve (price vs supply) is the marketequilibrium price. -Private enterprise require: private property rights, freedom of choice, profits, competition -Perfect competition exists when there are many small firms offering similar products and prices are set by supplydemand. -Monopolistic competition works when large or small firms makes their prices distinctive enough to have an influence of the price. Most sell at the same price but large companies could sell for little more. -Oligopoly occurs when few large firms dominate the market. -In natural monopolies like utilities, it is most efficient to have just one supplier. Chapter 2 Understanding the Environments of Business -Goals of an ideal economy: growth, stability and full employment. -Business cycle is short term and consists of peak, recession, trough and recovery. -Economic growth is measured by aggregate outputthe total quantity of goods and services produced. -When output growth exceeds that of the population, it results in higher standard of livinggoods and services available to a citizen. -GNP and GDP both measures the goods and services produced by a country but GDP only measures production via domestic means, while GNP takes account the output of certain companies abroad. Production of foreign firms in domestic soil can be part of the GDP. Wages are part of the respective countrys GNP. -GPI takes into account factors that could harm a countrys environment and quality of life (e.g. oil spills). -GDP is the most common measure when adjusted for inflation and currency values (real GDP). If the GDP is not adjusted for current values and prices, than it is consider a nominal GDP. Read pg 24 -Growth de
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