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RSM100Y1 (431)
Chapter 18

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Department
Rotman Commerce
Course
RSM100Y1
Professor
Michael Szlachta
Semester
Fall

Description
RSM Notes 1 Chapter 1 The concept of business and profit Business: an organization that seeks to earn profits by providing goods and services Profit: what remains after a businesss expenses have been subtracted from its revenues Business exist to earn profits for owners and consumers have freedom of choice, business won not be survived if there is no demand for its goods or services Businesses produce most of the goods and services we consume and they employ the majority of working people. They create new innovations and provide opportunities of other business, which serve as their suppliers Business taxes help to support government at all levels Economic system: They way in, which a nation allocates its resources among its citizens Factors of Production: the resources used to produce goods and services: labor, capital, entrepreneurs, and natural resources Labor: The mental and physical training and talents of people (human resource) Capital: the funds needed to operate an enterprise, it is needed to start a new business and then to keep it running and growing, a major source of capital for small businesses is personal investment by owners Entrepreneurs: an individual who organizes and manages labor, capital and natural resources to produce goods and services to earn a profit but who also runs the risk of failure Natural resource: items used in the production of goods and services in their natural state, including land, water, mineral deposits, and trees Information resources: information such as: market forecasts, economic data, and specialized knowledge of employees that is useful to a business and that helps it achieve its goals Types of Economic Systems: A command system: an economic system in which government controls all or most factors of production and makes all or most production decisions A market economic system: an economic system in which individuals control all or most factors of production and make all or most production decisions www.notesolution.com
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