Card Set Information
The Business System
What is a business?
An organization that sells good or services for a profit
What roles do businesses play?
Produces goods and services used my Canadians
Pays profit to shareholders/owners
Provides community leadership
What is profit?
Anything that remains after the cost of production is taken from the revenues.
Name 5 factors of production
Labour/Human Resources, Capital, Entrepeneur, Natural/Physical Resources, Information Resources
What are labour/human resources?
The mental and physical training and talents of people
What is capital?
The funds needed to start and operate an enterprise
What is an entrepeneur?
People who accept the risks and opportunities associated with starting and operating a business
What are natural/physical resources?
Items used in the production of goods and services in their natural state.
What are information resources?
information such as market forecasts, economic date, and specialized knowledge of employees that is useful to a business, helping it achieve its goals
What do economic systems do?
Allocate a nation's resources among its citizens
What are the 3 types of Economic Systems?
Command Economy (Communism/Socialism), Market Economy(Input Market/Output Market), Mixed Market Economy(a trend towards deregulization/privatization)
How does the government influence businesses?
As a buyer, competitor, regulator, taxation agent, provider of incentives/financial assistance, and as a provider of essential service)
How do businesses influence government?
As a lobbyist, with trade associations, and advertising
Exchange process between buyers and sellers
Willingness/ability of buyers to purchase a product or service
Willingness/ability of sellers to offer a product or service for sale
Define Law of Demand
Purchasers will purchase more of a product as the price drops
Define Law of Supply
Producers will offer more of a product as the price rises
Define Equilibrium or Market Price
The point at which the supply curve intersects the demand curve
More supply than demand
More demand than suppy
What do Private Enterprises allow individuals to do? Which book is it based off of?
Pursue their own interests with minimal government restriction. "The Wealth of Nations"
What 4 key elements does Private Enterprise require?
Private Property, Freedom of Choice, Profits, Competition
What are the four degrees of competition?
Pure or perfect competition
1400-1700. Commercial fishing, fur trading, mercantilism.
1700s. Factory system & "Cotton Ginny"; specialization of labour
Late 1800s. Steam power, immense wealth, collusion and first anti-combines legislation (1889)
Early 1900s. Assembly lines, technical efficiency, productivity gaines, selling stock, professional managers.
Sales and Marketing Era...
1930-1970. Creating consumer demand, market research
1980s. Decade of greed. Hostile takeovers and corporate raiders, asset stripping
1990s/Present. Emergence of true, global economy. Rapid information technology, internet use.