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What is a business?
An organization that sells good or services for a profit
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What roles do businesses play?
- Produces goods and services used my Canadians
- Employs
- Pays profit to shareholders/owners
- Supports charities
- Provides community leadership
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What is profit?
Anything that remains after the cost of production is taken from the revenues.
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Name 5 factors of production
Labour/Human Resources, Capital, Entrepeneur, Natural/Physical Resources, Information Resources
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What are labour/human resources?
The mental and physical training and talents of people
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What is capital?
The funds needed to start and operate an enterprise
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What is an entrepeneur?
People who accept the risks and opportunities associated with starting and operating a business
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What are natural/physical resources?
Items used in the production of goods and services in their natural state.
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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
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What do economic systems do?
Allocate a nation's resources among its citizens
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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)
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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)
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How do businesses influence government?
As a lobbyist, with trade associations, and advertising
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Define market
Exchange process between buyers and sellers
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Define Demand
Willingness/ability of buyers to purchase a product or service
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Define supply
Willingness/ability of sellers to offer a product or service for sale
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Define Law of Demand
Purchasers will purchase more of a product as the price drops
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Define Law of Supply
Producers will offer more of a product as the price rises
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Define Equilibrium or Market Price
The point at which the supply curve intersects the demand curve
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Surplus
More supply than demand
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Define Shortage
More demand than suppy
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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"
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What 4 key elements does Private Enterprise require?
Private Property, Freedom of Choice, Profits, Competition
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What are the four degrees of competition?
- Pure or perfect competition
- Monopolistic Competition
- Oligopoly
- Monopoly/Natural Monopoly
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Early Years...
1400-1700. Commercial fishing, fur trading, mercantilism.
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Industrial Revolution...
1700s. Factory system & "Cotton Ginny"; specialization of labour
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Entrepeneurial Era...
Late 1800s. Steam power, immense wealth, collusion and first anti-combines legislation (1889)
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Production Era...
Early 1900s. Assembly lines, technical efficiency, productivity gaines, selling stock, professional managers.
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Sales and Marketing Era...
1930-1970. Creating consumer demand, market research
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Finance Era...
1980s. Decade of greed. Hostile takeovers and corporate raiders, asset stripping
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Global/Internet Era
1990s/Present. Emergence of true, global economy. Rapid information technology, internet use.
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