Lesson 1: Understanding Canadian Business Essentials Flashcards
What is a business?
An organization that produces or sells goods or services to make a profit.
What is profit?
The amount remaining after a business’s expenses are subtracted from its sales revenues.
What is a not-for-profit organization?
An organization that provides goods/services without seeking to make a profit.
What is an economic system?
The way in which a nation allocates its resources among its citizens.
What are the five factors of production?
Labour, capital, entrepreneurs, natural resources, information.
Define a command economy.
The government controls all or most factors of production and makes all production decisions.
Define a market economy.
Individuals control all or most factors of production and make production decisions.
What is capitalism?
A system where markets decide what, how, and for whom to produce.
What is a mixed market economy?
Combines elements of command and market economies.
What is privatization?
Transferring activities from the government to the private sector.
What is deregulation?
Reducing the number of laws affecting business activity.
What is an input market?
Where firms buy resources needed for production.
What is an output market?
Where firms supply goods/services in response to consumer demand.
What is demand?
The willingness and ability of buyers to purchase a product/service.
What is supply?
The willingness and ability of producers to offer goods/services for sale.
What is the law of demand?
Buyers will purchase more of a product as its price drops.
What is the law of supply?
Producers will offer more of a product as its price rises.
What is market price (equilibrium)?
The price at which quantity demanded equals quantity supplied.
What is a surplus?
Quantity supplied exceeds quantity demanded.
What is perfect competition?
Many small firms producing identical products; no firm can influence price.
What is monopolistic competition?
Many firms offering similar but slightly different products; some pricing power.
What is an oligopoly?
A few large firms dominate; products may be similar or different; high market power.
What is a monopoly?
A single firm controls the market and sets prices.
What are the four elements of private enterprise?
Private property, freedom of choice, profits, and competition.
Name the roles government plays in business.
Customer, competitor, regulator, taxation agent, incentive provider, service provider.
What is a lobbyist?
A person hired to influence government decisions on behalf of a company or industry.
What is a trade association?
An organization that promotes and supports the interests of an industry.
What are progressive revenue taxes?
Taxes levied at a higher rate on higher-income earners.
What are regressive revenue taxes?
Taxes levied at the same rate for everyone, affecting lower-income individuals more.
What are restrictive taxes?
Taxes aimed at limiting consumption (e.g., tobacco, alcohol).
How can businesses benefit society?
They provide jobs, pay taxes, and create goods/services that improve life.
Give an example of surplus causing lower prices.
Rain leads to excess grain → lower prices to attract buyers.
Give an example of shortage causing higher prices.
Off-season fruit → supply drops, prices rise.
How does government support like the Bombardier case affect free-market principles?
It distorts the system by giving unfair advantage, violating the free-market ideal.
