THANKS TO ALL THOSE WHO CONTRIBUTED. THE DEFINITIONS WILL START
FROM PAGE 2.
Sadly, not all the term sets were chosen/sent in. We covered most of them though TERMS SET 1 (NO ONE CONTRIBUTED )
Factors of production:
TERMS SET 2 (BY: SHANTU TIWARI)
Private Enterprise System: A type of economic system in which businesses need to
recognize consumer demands, and fulfill them. Profitable firms in this system fulfill
consumer demands the best. For example, businesses in Canada and the US function
under this system. In this system, it is necessary to fulfill consumer demands to gain
profit. This profit will result in access to more factors of production, which can be
used to generate even bigger profits.
Capitalism: Another name for private enterprise system (it is the same thing).
Businesses need to realize what consumers demand, and produce that product. The
businesses that serve consumers the best gain the largest profits.
Competition: The struggle between businesses to gain consumers. Businesses are
constantly battling for consumers to gain more profit. Businesses battle for
consumers in a number of ways, and the most important being a quality product. As
businesses compete for customers, they have to give out a better product than their
competition, so that the consumer buys from them. Due to this, less efficient firms
are driven out of the industry, whereas those firms that exceed consumers’ demands
are successful. For example, Microsoft and Google are competitors in the web,
consistently exceeding customer’s wants.
Competitive Differentiation: The way a company is unique compared to its
competition in the eyes of the consumers. It can be a combination of products sold,
abilities of the company, or selling approaches. Competitive differentiation is
needed in order for a firm to compete successfully.
Private Property: The most basic freedom in a Capitalist society. Like the name
suggests, it is essentially the right to own private property. It is the right to own, use,
buy, and sell any property owned. The citizens in a capitalist society need to have certain rights, and private property is the most basic. An example would be a
businessman that owns a building where his work is conducted. The building is a
form of private property, and the businessman can use it, buy it, sell it, or do
anything with it that he chooses.
Entrepreneur: A person who sets up and runs a business, because there is an
opportunity to generate profit. Entrepreneurs need to take numerous risks and
overcome many obstacles to be successful. Entrepreneurs are important to society
because they lead to economic growth, and keep pressure on existing companies to
exceed consumer demands. Essentially, the private enterprise system wouldn’t even
exist if people did not take risks and become entrepreneurs.
Consumer Orientation: Products that are designed by a business, to focus on
consumers’ unmet wants. In this philosophy, consumers are focused on first by the
business, and their wants dictate which products are sold. As a result of this,
consumers have an immense amount of choices in the market, because businesses
are looking to satisfy them. For example, Samsung is always creating new phones,
depending on what consumers want.
TERMS SET 3 (BY: YANGFANG SONG)
Brand: A term, logo, sign or in other forms that creates the identities of the products
of a firm. It is made in order to make the products stand out. Example can be Apple
Branding is the process of creating the uniqueness (such as services or goods) of
the firm into customer’s mind. It is a major marketing tool in contemporary
business. The Home Depot is an example since the community knows its brand for
its excellent customer services, an entrepreneur spirit and its feedbacks.
Transaction management: this approach was built during the Industrial
Revolution where firms concentrate on promoting and producing goods and
services in the hope that the revenue would cover the cost. More customers would
generate more revenue. The firms do not consider the ties with the customers.
Relationship Era: The firms began slowly to build ties with customers through
every transaction in order to obtain long-term customers. The strategy of customer
loyalty was being built and promoted. Less overall-cost, and knowledge of customer
preferences are both an advantage for the firms through competitive differentiation.
Relationship management: this approach is tied with Relationship Era which it
represents maintaining the ongoing ties with customers and the firms. It requires
the managers to gather the information on customers’ preferences and apply it to
pull the relationship ties with the customers closer. Technology: Many firms use some new technologies such as Blogs in order to
understand the current preferences and tastes of their customers. It also connects
the customer directly with the firm.
Strategic Alliances: businesses forms partnership in order to achieve a
comparative advantage. For example, online business such as Amazon or
Overstock.com may partner up with traditional retailers. Online shopping websites
have the strength on promoting and easy accessibility, whereas the retailers have
the knowledge on the proper quantity to purchase from the right merchandise. Both
of them would create a comparative advantage from such partnership.
TERMS SET 4 (BY: ADIL MANSOOR)
Diversity: The blending of individuals of different genders, ethnic backgrounds,
cultures, religions, ages, and physical and mental abilities to enhance a firm’s
chances of success.
Significance: Studies show that diverse employee teams and workforces tend
to perform tasks more effectively. They also develop better solutions to
business problems than homogenous employee group. This is mainly
because of the varied perspectives and experiences offered by a diverse
group of employees, who in turn promote innovation and creativity in
Example: Firms that made the top 10 in the list of “Top 50 Companies for
Diversity” were also leaders and innovators in their industries, including
Johnson & Johnson, AT&T, Ernst and Young, Coca-Cola, and IBM.
Outsourcing: Outsourcing is the use of outside vendors to produce goods or fulfill
services and functions that were previously handled in-house or in country.
Significance: Outsourcing can reduce costs and allow a firm to concentrate on
what it does best, while accessing expertise it may not have. However
outsourcing also creates its own challenges, such as differences in language
Example: Wal-Mart buys its products from international producers, which
allows them to get lower costs and thus they can offer us lower costs while
simultaneously getting a profit.
Offshoring: The relocation of business processes to lower-cost locations overseas.
Significance: Offshoring can involve both production and services. This
allows firms to get better in terms of labor. It also poses issues because such
jobs could have been provided to workers in the firm’s own country.
Example: China has emerged as the prime location for production offshoring,
while India has emerged as the prime location for service offshoring. This is
why many products you find in Canadian stores are usually “Made in China.”
This is also why whenever you get a Telemarketing call the caller has an
Indian accent. Nearshoring: The outsourcing of production or services to locations near a firm’s
Significance: Nearshoring allows for shipping costs and times to reduce
drastically. It also allows for better communication, and easier management
of the outsourced locations.
Example: Local food stores that tend to import their products from local
Vision: The ability to perceive marketplace needs and what an organization must do
to satisfy them.
Significance: Vision is a strong part of becoming successful. Managers and
businesspeople need to be able to understand current market needs and
appropriately fulfill them. Otherwise they will not have growth in their
Example: James Cameron won several Oscar awards, as well as, became a
huge part of Titanic and Avatar, the two movies that made the most profits.
This is because he understood what the audience wanted at each time and
produced the movies accordingly.
Critical thinking: The ability to analyze and assess information to pinpoint
problems or opportunities.
Significance: This should be drilled in everyone’s head. Critical thinking will
always lead to success. The upper level positions like CEOs, and managers
tend to gain their status because of their exceptional critical thinking skills.
Creativity: The capacity to develop novel solutions to perceived organizational
Significance: Creativity not only enhances and enriches the business world
through increasing innovation. It also marks as a standpoint for whether a
business can continue being successful or not.
TERMS SET 5 (BY: KATIE MCLEOD)
Economics: The social science that studies the choices people and governments
make when dividing up their scarce resources. There are three different types of
economic systems, they are capitalism, planned economies, and mixed market
economies. (Economic system- the exchanges that companies and societies make as
Microeconomics: A branch of economics that studies the behavior of individual
households and firms in making decisions on the allocation of limited resources.
Microeconomics examines how these decisions and behaviors affect the supply and
demand for goods and services, which determines prices, and how prices, in turn,
determine the quantity supplied and quantity demanded of goods and services. Macroeconomics: The sum total of economic activity, dealing with the issues of
growth, inflation, and unemployment. Macroeconomics is the study of a nation’s
overall economic issues, such as how an economy maintains and divides up
resources and how a government’s policies affect its citizens’ standards of living.
Demand: A consumer’s desire and willingness to pay a price for a specific good or
Supply: The total amount of a specific good or service that is available to
consumers. Supply can relate to the amount available at a specific price or the
amount available across a range of prices if displayed on a graph. This relates
closely to the demand for a good or service at a specific price; all else being equal,
the supply provided by producers will rise if the price rises because all firms look to
Demand curve: A graph depicting the relationship between the price of a certain
commodity and the amount of it that the consumers are willing and able to purchase
at that given price. Demand curves typically slope downward because lower and
lower prices attract larger and larger purchases.
Supply curve: Shows the relationship between different prices and the amount of
goods that sellers will offer for sale at those prices, regardless of demand.
(Movement along the supply curve is the opposite of movement along the demand
curve: as price rises, the quantity that sellers are willing to supply also rises. At
lower and lower prices, the quantity supplied decrease.)
Equilibrium price: the current market price for an item. (It is the point on a graph
where the supply curve and the demand curve meet). If the market price differs
from the equilibrium price, buyers and sellers tend to make purchase choices that
restore the equilibrium level. What would happen if the actual price were below the
equilibrium price? The demand would be higher than the supply. If the price were
above the equilibrium price there would be an excess supply.
TERMS SET 6 (BY: JESSIE ZHANG) VERY WELL DONE. THIS IS THE QUALITY WE
SHOULD ALL STRIVE FOR IN THE FUTURE
Monopoly Oligopoly Monopolistic Pure
Four Basic Types of Competition In Private
1. Pure Competition Textbook Definition: a market structure where large numbers of buyers and sellers
exchange similar products, and no single participant has a large influence on price.
-Prices are set by force of supply and demand.
-Firms can easily enter or leave the market
Example: small-scale agriculture. Wheat harvest by one farmer is about the same as
the wheat harvest by other farmers across Manitoba. The law of supply and demand
determines its price.
2. Monopolistic Competition
Textbook Definition: a market structure where large numbers of buyers and sellers
exchange distinct and differentiated (dissimilar) products so each participant has
some control over price.
-Somewhat difficult for new firm to enter the market.
-A success product often attracts new competitors.
Example: Prices of pet foods varies from brand to brand. Consumer can choose the
brand with the lowest prices, or sellers can convince consumers a more expensive
brand is worth more because it offers better nutrition.
Textbook Definition: a market situation where relatively few sellers compete and
high start-up costs act as barriers to keep out new competitors.
-Difficult for new competitors to enter the market
-Products can be similar (paper or steel) or different (aircraft models)
-Limit numbers of sellers increase control over price
Example: telecommunications companies like Bell and Rogers.
Textbook Definition: a market situation where a single seller controls trade in a
good or service, and buyers can find no close substitutes.
-No direct competition
-Government regulates market
-In a pure monopoly, individual firms have control over price. In a regulated
monopoly, government controls the price.
Example: Rawlings Sporting Goods, exclusive supplier of major-league baseballs.
Textbook Definition: a firm that is granted exclusive rights in a specific market by a
local, provincial, or federal government. Example: Canadian Radio-television and Telecommunications Commission (CRTC)
require no less than 8% of French-language films are Canadian.
Ontario Energy Board sets electricity and natural gats rates.
Two Forms of Planned Economies
Textbook Definition: an economic system where business ownership, profits, and
resource allocation are shaped by a plan to meet government goals, not goals set by
Textbook Definition: an economic system where the government owns and operates
the major industries, such as energy and communications.
-Private ownership in less important industries such as restaurants.
-Major industries are too important to be left in private hands.
Textbook Definition: an economic system where all property is shared equally by
the people in a community under the direction of a strong central government
-The people share all properties equally. Resources are divided up according to
individual need. Each person contributes to the nation’s overall economic success.
Example: former Russia
Mixed Market Economy
Textbook Definition: an economic system that draws form both private enterprise
economies and planned economies, to different degrees.
Example: Canada’s health care, education and electricity generation are fun by the
Textbook Definition: the conversion of government-owned and operated companies
to privately held businesses.
Example: Air Canada use to be a government owned airline. In 1989, it became fully
TERMS SET 7 (BY: EMMA CAI)
Recession: a cycle of economic contraction that lasts for six months or longer
Productivity: the relationship between the number of units produces and the
number of human and other production inputs needed to produce them Gross Domestic Product (GDP): the sum of all goods and services produced within
a country during a specific time period, such as a year
Consumer Price Index (CPI): a measurement of the monthly average change in
prices of goods and services.
Inflation: rising price caused by a combination of excess consumer demand and
higher costs of raw material, component parts, human resources, and other factors
Core inflation rate: the inflation rate after energy prices and food prices are
Hyperinflation: an economic situation marked by soaring prices
Deflation: the opposite of inflation occurs when prices continue to fall
Unemployment rate: the percentage of the total workforce actively seeking work
but currently unemployed
TERMS SET 8 (BY: CHERYL LI)
Definition: A time period of unemployment due to transition between jobs or
searching for another job.
Example: Movie stars are unemployed between movies. (Assuming they only
Definition: Unemployment due to the change of season.
Example: Ice cream carts in the winter.
Definition: Unemployment due to the economic cycle (during
Example: Since the economy is in recession and businesses aren’t as strong
as before, companies need to cut down their cost to prevent loses. One of the
ways to cut down costs is to fire people, therefore causing cyclical
Definition: Unemployment due to the change of society’s needs on skills. Example: Many tailors are unemployed because their skill is no longer in
need. (Factories produce clothes now)
TERMS SET 9 (BY: SOPHIE HOWE)
Monetary Policy: a government plan to increase or decrease the money supply in an
economy and to change banking requirements and interest rates.
This affects bankers’ willingness to make loans, and loaners’ willingness to
apply for loans.
Expansionary Monetary Policy: Government plan to increase the money supply to
try to decrease the cost of borrowing.
These decreased interest rates will encourage borrowers (ex businesses) to
make more investments. These investments lead to an increase in
employment and cause for economic growth.
Restrictive Monetary Policy does the opposite; reduce money supply to control rising
prices, overexpansion and overly rapid economic growth.
Fiscal Policy: a government plan entailing an increase or decrease of governmental
taxation and spending. This is designed to control inflation, reduce unemployment
and improve general welfare.
Budget: an organizations plan on spending and raising money during a specific time
Budget Deficit: the government spends more than it raises (through taxes) –
spending > earning
National Debt: the money the Federal government owes to individuals,
governmental agencies and businesses who purchase Treasury bills, Treasury notes
and Treasury bonds.
Real life Example: Israel bond advertisements
Budget Surplus: government takes in more than it spends. Spending < earning
Balanced Budget: total revenues earned by taxation equal total spending of year;
spending = earning
Will not erase national debt. Treasury bills are safe international investments. (If
bills not always available, will be considered an unappealing investment and
investors will turn to other countries.) Government will use balance or surplus to
invest in infrastructure.
TERMS SET 10 (NO ONE CONTRIBUTED )
Home-based Businesses Business plan
Business Development Bank of Canada (BDC)
TERMS SET 11 (BY: SATHYA SUBBIAH)
Sole-Proprietorship: a business/firm that is owned and is run by one single
This one person oversees all problems, and has full control over the firm. All profits
go to this owner, but any losses that occur are the responsibility of the proprietor as
well. It can be quite tricky to raise any kinds of long-term capital. It is the most
common form of business in Canada.
Examples: Tutors, financial planners, catering companies, freelance writers
Partnership: A firm/business, which is being operated by two or more people.
Having a partner makes a partnership easier to form and keep running than a sole
proprietorship. Finances are easier to pay, and tasks can be divided up equally.
However there is a negative to having a partner as well. Both partners will be
responsible for the mistakes. A mistake from one partner does not mean only one
partner getting the blame. Both will get the blame
Examples: Ernst and Young is a Limited liability partnership. This means that it has
points from a corporation and a partnership.
Corporations: It is a firm in which owners in which the owners (shareholders) have
limited financial liability. The board of directors, who are appointed by the
shareholders, controls the company. A corporation can be either public or private.
Usually a private company is that which has very few stockholders, and does not all
stocks to be traded in the public stock market. A public corporation offers its stocks
to the public, and as such has many stockholders.
Examples: Private- KPMG, PricewaterhouseCoopers, IKEA. Public- Disney, Apple,
Microsoft Non-profit Corporation: A corporation whose main objective is to achieve its goals,
rather than gain profit. In Canada about 160,000 organizations are not for profit.
Not for profit organizations are exempt from paying