definitions Flashcards
Profit
income ($) left after costs and expenses are paid.
Profit Formula
Profit (or loss) = revenue - expenses
Solvent/Solvency
The business is solvent when debts are paid and financial obligations are met.
Profit vs non-profit organiziations
Non-Profit Organizations
1. Primary motive is to raise funds for a specific goal so as to help people in a community.
2. Only charities and charitable organizations are called non-profits.
Profit organizations
1. Charges fees for goods and services.
2. Uses surplus (extra) funds to improve its goods and services (but does not distribute profits to members)
small and medium-sized businesses
- Employ fewer than 500 people each.
- Account for over one million businesses in Canada.
- Provide jobs for more than 60 percent of the Canadian workforce.
5 types of business ownership
sole proprietorship, partnership, cooperative, corporation, franchise
decision-making process
- Determine what decision has to be made.
- Identify the alternatives.
- Evaluate the advantages and disadvantages of each alternative.
- Make a decision and take action.
- Evaluate the decision.
Businesses pricing power v. consumers’ purchasing power
Producer v. consumer
economist
marketplace
obsolete
types of economic resources
interdependent/interdependence
law of supply
law of demand
law of demand
sole proprietorship
owned by one person.
partnership
owned by two or more partners.
corporation
an artificial “person” created by law and owned by shareholders
Co-operative
owned by its workers or members who buy from the business.
franchise
when a business licenses another to use its name, operating procedure, etc. under an above form of ownership.
entrepreneur
The person who takes risks and starts a venture to solve a problem or take advantage of an opportunity. A person who provides an innovative product to meet consumers’ wants and needs.
entrepreneur
The person who takes risks and starts a venture to solve a problem or take advantage of an opportunity. A person who provides an innovative product to meet consumers’ wants and needs.
needs v. wants
Needs - basic necessities for survival like food, clothing, and shelter.
Wants - something that adds comfort or pleasure to a consumer’s life. (we can live without it).
