MGTA01H3 Chapter Notes - Chapter 1: Economic System, Market Economy

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Published on 3 Oct 2012
School
UTSC
Department
Management (MGT)
Course
MGTA01H3
Professor
MGTA01 Chapter 1 Notes:
Business – an organization that produces or sells goods or services in an effort to make a
profit.
Revenue – The money a business earns selling its product and services.
Expenses – The money a business spends producing its goods and services and generally
running the business.
Profit – The money that remains (if any) after a business’s expenses are subtracted from its
revenue.
- Business produces most of the good and services we consume. Creates job
opportunities and advances our technology and living.
Economic system: the way in which a nation allocates its resources among its citizens. It
differ in terms of who owns and control these resources, know as factor of productions.
Factors of Production:
The resources uses to produces good:
Labour – Labour consist of mental and physical capabilities of people. The more skilled
and knowledgeable gives you an advantage in the market.
Capital – Labour and other resources requires capital. Capital is the financial funding or
resources of an operating enterprise. In sole proprietor, personal investment must be
somewhat made to keep the business ongoing.
Entrepreneurs – An individual who organizes, and manages labour and capital and natural
resources to produce goods and service to earn a profit, but who also runs the risk of
failure.
Information resouirces – plays a major rule in collecting competitions and market forecast ,
economic data, and creates new information or repackages existing information for new
users and different audiences.
Type of economic system:
- Command economy – relies on centralization of government to control all or most of the
factor of production and allocation decisions.
- Market economy individual produces and consumers and controls the most of demand
and supply.
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Document Summary

Business an organization that produces or sells goods or services in an effort to make a profit. Revenue the money a business earns selling its product and services. Expenses the money a business spends producing its goods and services and generally running the business. Profit the money that remains (if any) after a business"s expenses are subtracted from its revenue. Business produces most of the good and services we consume. Creates job opportunities and advances our technology and living. Economic system: the way in which a nation allocates its resources among its citizens. It differ in terms of who owns and control these resources, know as factor of productions. Labour labour consist of mental and physical capabilities of people. The more skilled and knowledgeable gives you an advantage in the market. Capital labour and other resources requires capital. Capital is the financial funding or resources of an operating enterprise.

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