Textbook Notes (363,452)
Canada (158,372)
RSM100Y1 (431)
Chapter 1

Chapter 1 Summary

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University of Toronto St. George
Rotman Commerce
Michael Szlachta

Chapter 1 Economic System - The way in which a nation allocates its resources among its citizens Factors of Production The resources used to produce goods and services: labour, capital, entrepreneurs, and natural resources. Labour The mental and physical training and talents of people. Capital The funds needed to operate an enterprise. - Investment by owners, entrepreneurs, partners who start the business, or investors who buy stock Entrepreneurs An individual who organizes and manages labour, capital, and natural resources to produce goods and services to earn a profit. Natural Resources 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 Command Economy An economic system in which government controls all or most factors of production and makes all or most production decisions. Communism A type of command economy in which the government controls all or most factors of production. Socialism A kind of command economy in which the government owns and operates the main industries, while individuals own and operate less crucial industries. - Large proportion of people work for the government Market Economies An economic system in which individuals control all or most factors of production and make all or most production decisions. - B2B (business to business transactions) is more efficient than B2C (business to consumer, ordering things over the internet). - Very little government involvement. www.notesolution.com
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