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Ch. 1: Introducing the Contemporary Business World
Business: organization seeking to earn profit by providing products (ma
y be tangible or service).
oProfit: money that remains after a business expenses (money sp
ent in
production and running the business) are subtracted from its
revenue (money earned through sale of products).
Economic system: way which nation allocates resources among citizens.
Differ in terms of resource ownership and resource control.
oThese resources are call Factors of Production (5):
Labour (human resources) and the skills of a workforce
Capital (financial resources) needed to start and run an e
nterprise
Natural Resources: all physical resources.
Information Resources (specialized knowledge): market fo
recasts,demographics, help to achieve business goals.
Entrepreneurs: accept risks and opportunities; manage al
l other factors of production in the firm.
Types of Economic systems:
o Command Economies (centralized government, government own
s most
industries), communism (government owns all industries), soci
alism (only some major industries are controlled).
oMarket Economies (individuals make decisions about factors of
production): market (mechanism for exchange), freedom of choi
ce widely enjoyed.
Capitalism: Political idea with private ownership and
encouragement of entrepreneurship.
o MixedMarket Economies: most economic systems, elements of
both
command and market. Current trend towards privatization (tr
ansfer of
government activities to public sector because government
managed
industries are inefficient) and deregulation (reducing laws that
affect business activities)
Governments influence business as 6 things:
oCustomers (Eg: office supplies, military supplies)
oCompetitors (Eg: Crown corporations owned by government com
pete with private sector)
oRegulator:
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Document Summary

Differ in terms of resource ownership and resource control: these resources are call factors of production (5): labour (human resources) and the skills of a workforce. capital (financial resources) needed to start and run an e nterprise. Information resources (specialized knowledge): market fo recasts,demographics, help to achieve business goals. capitalism: political idea with private ownership and: mixed market encouragement of entrepreneurship. Economies: most economic systems, elements of both command and market. protecting consumers: eg: safety standards, warning lab els. achieving social goals: eg: safe workplaces, employment insurance. protecting environment: eg: laws governing emissions a nd waste: taxation agent: revenue taxes fund government programs, eith er. Progressive (higher tax rate for higher incomes) or regressive (l ower incomes pay higher percentage of income). law of demand: buyer purchases more when price drops: supply: willingness and ability for producer to offer product.

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