Textbook Notes (363,283)
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MGTA01H3 (583)
Chapter 1

Chapter 1 Notes

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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

Wednesday, September 16, 2009 NN: Chapter 1 [MGTA03] The Concept of Business and Profit Business: Organization that produces or sells goodsservices to make a profit Profit: The money remained after revenue - expenses = profit Expenses: The money spend on producing goods andor running business Revenues: The money earned when selling goodsservices Business profits increase personal incomes & business taxes support government Economic Systems Around the World Economic system: the way a nation allocates its resources among its citizens Economic systems differ in ways of who controls and owns resources Factors of Production I. Labour: mental and physical training and talents of people A. Employees who are well trained is an advantage to a business II. Capital: funds needed to operate a business A. Funds come from personal investment, shares, revenues III. Entrepreneurs: one who organizes factors of production to earn a profit (risky) IV. Natural Resources: Items used to make goodsservices from natural states V. Information Resources: Useful information used to help business achieve goals Types of Economic Systems I. CommandPlanned Economy: Government owns and operates all industries A. Communism: Government ownscontrols all of the factors of production, makes almost 100% of the economic decisions (Ex: Nor
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