Ch1 Flashcards
business
An organization that seeks to earn profits by providing goods and services.
profit
What remains (if anything) after a business’s expenses are subtracted from its sales revenues.
not-for-profit organization
An organization that provides goods and services to customers, but does not seek to make a profit while doing so.
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; sometimes called human resources.
capital
The funds needed to operate an enterprise.
entrepreneur
An individual who organizes and manages labour, capital, and natural resources to produce goods and services to earn a profit, but who also runs the risk of failure.
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.
command economy
An economic system in which government controls all or most factors of production and makes all or most production decisions.
market economy
An economic system in which individuals control all or most factors of production and make all or most production decisions.
communism
A type of command economy in which the government owns and operates all industries.
socialism
A kind of command economy in which the government owns and operates the main industries, while individuals own and operate less crucial industries.
market
An exchange process between buyers and sellers of a particular good or service.
input market
Firms buy resources that they need in the production of goods and services.
Which country was ranked as the world’s top country in which to do business by Forbes in 2011?
Canada
Who is Mike Miltimore?
His family owns Lee’s Music and he is the creator of Riversong Guitars
output market
Firms supply goods and services in response to demand on the part of consumers.
capitalism
An economic system in which markets decide what, when, and for whom to produce.
mixed market economy
An economic system with elements of both a command economy and a market economy; in practice, typical of most nations’ economies.
privatization
The transfer of activities from the government to the private sector.
nationalization
The transfer of activities from private firms to the government.
deregulation
A reduction in the number of laws affecting business activity.
CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION (CRTC)
Regulates and supervises all aspects of the Canadian broadcasting system.
Canadian Wheat Board
Regulates the price farmers receive for their wheat.
Competition Act
Prohibits a variety of business practices that lessen competition.
Tobacco Act
Prohibits cigarette advertising on billboards and in retail stores and assigns financial penalties to violators.
Weights and Measurements Act
Sets standards of accuracy for weighing and measuring devices.
Consumer Packaging and Labelling Act
States Labelling requirements for products
Textile Labelling Act
Regulates the labelling, sale, importation, and advertising of consumer textile articles
Food and Drug Act
Prohibits the sale of food unfit for human consumption and regulates food advertising
Canada Consumer Product Safety Act
Regulates banned products and products that could be sold but must be labeled as hazardous
Social goals
Improve well-being of Canadian society
Examples: healthcare, workplace safety, employment insurance, and pensions
Canada Water Act
Controls water quality in fresh and marine waters of Canada
Fisheries Act
Regulates the discharge of harmful substances into water
Environmental Contamination Act
Makes rules for airborne substances that are dangerous for humans or environment
revenue taxes
taxes whose main purpose is to fund government services and programs
progressive revenue taxes
taxes levied at a higher rate on higher-income taxpayers and at a lower rate on lower-income taxpayers
regressive revenue taxes
taxes that cause poorer people to pay a higher percentage of their income than richer people pay
restrictive taxes
taxes levied to control certain activities that legislators believe should be controlled
What essential services does the federal government supply?
- postal service, highways, minting of money, armed forces, and statistical data on which businesses make decisions
lobbyist
person hired by a company or an industry to represent its interests with government officials
trade association
an organization dedicated to promoting the interests and assisting members of a particular industry
market
an exchange between buyers and sellers of a particular good or service
demand, supply
demand: the willingness and ability of buyers to purchase a product/service
supply: the willingness and ability of producers to offer a good/service
law of demand
principle that buyers will purchase more of a product as price drops
law of supply
principle that producers will offer more of a product as price rises
demand and supply schedule
assessment of the relationships between different levels of demand and supply at different price levels
market price
profit-maximizing price at which the quantity of goods demanded and the quantity of goods supplied are equal (equilibrium price)
private enterprise
an economic system characterized by private property rights, freedom of choice, profits, and competition
perfect competition
A market or industry characterized by a very large number of small firms producing an identical product so that none of the firms has any ability to influence price.
monopolistic competition
A market or industry characterized by a large number of firms supplying products that are similar but distinctive enough from one another to give firms some ability to influence price.
oligopoly
A market or industry characterized by a small number of very large firms that have the power to influence the price of their product and/or resources.
monopoly
a market or industry with only one producer, who can set the price of its product and/or resources
natural monopoly
a market or industry in which having only one producer is most efficient because it can meet all of consumers/ demand for the product
