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MGM101 > MGM101 CH3 > Flashcards

MGM101 CH3 Flashcards

1
Q

How does Shopify support the growth of a merchant’s business as it expands?

A

Shopify helps businesses grow by providing a scalable platform that integrates various sales channels, including web, mobile, bricks and mortar, marketplaces, and pop-up stores.

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2
Q

In addition to simplifying e-commerce, how does Shopify assist entrepreneurs with marketing and financial services?

A

Shopify assists entrepreneurs with marketing through social media platforms like Facebook, Instagram, Pinterest, and TikTok, and offers small business loans through Shopify Capital.

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3
Q

How has Shopify expanded its services to enhance merchants’ agility and fulfilment capabilities?

A

Shopify has expanded by allowing merchants to print shipping labels through a mobile app and has acquired a warehouse robotics company for $450 million, signaling its growth into a fulfilment service for a broad range of merchants.

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4
Q

What is a business?

A

An organization that seeks to earn profits by providing goods and services.

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5
Q

What is profit?

A

What remains (if anything) after a business’s expenses are subtracted from its sales revenues.

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6
Q

What is a not-for-profit organization?

A

An organization that provides goods and services to customers but does not seek to make a profit while doing so.

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7
Q

What are some key issues that business managers must focus on?

A

Business managers must focus on corporate strategy, brand strategy, business-government relations, international business opportunities, and other management concepts.

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8
Q

How do businesses contribute to society beyond providing goods and services?

A

Businesses contribute to society by employing a significant portion of the workforce, paying taxes that support government services, supporting charitable causes, and providing community leadership.

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9
Q

What are some examples of not-for-profit organizations?

A

Examples of not-for-profit organizations include charities, educational institutions, hospitals, labour unions, and government agencies.

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10
Q

How do not-for-profit organizations generate funds?

A

Not-for-profit organizations generate funds from government grants or the sale of goods and services to provide public services rather than seeking profits.

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11
Q

What is the key difference between economic systems?

A

The key difference between economic systems is how they manage the factors of production, which are the basic resources a country’s businesses use to produce goods and services.

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12
Q

What are the five factors of production?

A

The five factors of production are labour, capital, entrepreneurs, natural resources, and information.

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13
Q

How is ‘labour’ defined as a factor of production?

A

Labour, sometimes referred to as “human resources,” is the mental and physical capabilities of people who work for a company, and it includes a wide range of skills, such as those of managers, geologists, and truck drivers.

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14
Q

What does ‘capital’ represent in the context of production?

A

Capital refers to the funds required to start a business and to keep it operating and growing. It can come from personal investment, the sale of stock, profits, or loans from banks and other institutions.

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15
Q

Who are entrepreneurs, and what role do they play in the factors of production?

A

Entrepreneurs are individuals who accept the opportunities and risks involved in creating and operating businesses, like Sergey Brin and Larry Page (Google) and Vera Wang (fashion line).

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16
Q

What are ‘natural resources’ in the context of factors of production?

A

Natural resources are all physical resources such as land, water, mineral deposits, and trees that businesses use to produce goods and services.

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17
Q

What is ‘information’ in the context of factors of production?

A

Information includes the specialized knowledge and expertise of people who work in businesses, as well as information contained in market forecasts and various other forms of economic data. Information is a key factor of production because, unlike land, labour, and capital, information can be shared without being diminished

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18
Q

What is a command economy?

A

An economic system in which government controls all or most factors of production and makes all or most production decisions.

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19
Q

What is a market economy?

A

An economic system in which individuals control all or most factors of production and make all or most production decisions.

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20
Q

What is communism?

A

A type of command economy in which the government owns and operates all industries.

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21
Q

In a less extensive command economic system called socialism, the government…

A

…owns and operates only selected major industries

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22
Q

What is a market?

A

An exchange process between buyers and sellers of a particular good or service

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23
Q

What is an input market?

A

Firms buy the resources they need in the production of goods and services.

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24
Q

What is an output market?

A

Firms supply goods and services in response to demand on the part of consumers.

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25
Q

What is capitalism?

A

An economic system in which markets decide what, when, and for whom to produce

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26
Q

What is a mixed market economy?

A

An economic system with elements of both a command economy and a market economy, which in practice is typical of most nations’ economies.

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27
Q

What is Privatization?

A

The transfer of activities from the government to the private sector.

28
Q

What is deregulation?

A

A reduction in the number of laws affecting business activity.

29
Q

What role does the government play as a customer in the Canadian economy?

A

The government purchases a wide range of products and services from businesses, such as office supplies, computers, battleships, highways, and consulting services. Many businesses rely on government purchasing for their prosperity or survival.

30
Q

Why is government purchasing important for businesses?

A

Government purchasing is important because many businesses rely on these contracts for a significant portion of their income. The government’s large-scale buying supports industries and can help ensure a certain level of prosperity for these businesses.

31
Q

What is the Competition Act

A

Prohibits a variety of business practices that lessen competition.

32
Q

How does the Canadian government compete with businesses?

A

The Canadian government competes with businesses through Crown corporations, such as Hydro-Québec and Canada Post. These Crown corporations generate billions in revenue and play a significant role in the economy at both provincial and federal levels.

33
Q

Why does the Canadian government regulate business activity to promote competition?

A

The government promotes competition to prevent large companies from using their vast resources to cut prices and drive smaller firms out of the market. The Competition Act in Canada outlines guidelines to ensure healthy competition among businesses.

34
Q

What are some key legislative acts in Canada aimed at protecting consumers?

A

Key legislative acts include the Tobacco and Vaping Products Act (prohibits cigarette advertising on billboards and in stores), the Weights and Measures Act (sets accuracy standards for weighing and measuring devices), the Consumer Packaging and Labelling Act (stipulates labelling requirements for products), and the Food and Drugs Act (prohibits the sale of food with harmful substances).

35
Q

How does Canadian government legislation help protect the environment?

A

Environmental protection legislation includes the Canada Water Act (controls water quality), the Fisheries Act (regulates harmful substances discharged into water), and the Canadian Environmental Protection Act (regulates airborne substances that pose a risk to human health or the environment).

36
Q

What is the primary purpose of revenue taxes, and how do progressive and regressive taxes differ?

A

The primary purpose of revenue taxes is to generate funds for various government services and programs. Progressive taxes are levied at a higher rate on higher-income individuals and a lower rate on lower-income individuals. Regressive taxes, like sales tax, are levied at the same rate for everyone, causing lower-income people to pay a higher percentage of their income than wealthier individuals.

37
Q

What are restrictive taxes, and why are they imposed?

A

Restrictive taxes are levied on products like alcohol, tobacco, and gasoline. They are imposed partially for revenue but also to control consumption of these products, as legislators believe they should be regulated due to their potential harm.

38
Q

How does the government provide incentives and financial assistance to stimulate economic development?

A

The government offers incentive programs, such as tax breaks, grants, and subsidies. For example, the Alberta government offered a property tax holiday and removed oil-drilling equipment taxes in 2020 to support the energy sector affected by low crude oil prices and the pandemic.

39
Q

What is Export Development Canada (EDC), and how does it assist businesses?

A

Export Development Canada (EDC) assists Canadian exporters by offering export insurance against non-payment by foreign buyers and providing long-term loans to foreign buyers of Canadian products.

40
Q

How does Innovation, Science and Economic Development Canada support small businesses?

A

Innovation, Science and Economic Development Canada offers various programs to support small businesses, including assistance with business growth, access to funding, and initiatives aimed at fostering innovation and development.

41
Q

What are some examples of government incentive programs offered to businesses?

A

Examples include municipal tax rebates for companies that locate in certain areas, design assistance programs, tariff remission on advanced technology production equipment, and geological mapping provided by Natural Resources Canada to support mining and resource industries.

42
Q

What potential challenges can arise from government incentive programs?

A

While government incentive programs aim to stimulate the economy, they may not always have the desired effect. Additionally, these programs can cause difficulties with international trading partners, who may view them as unfair competition or subsidies.

43
Q

What is a Lobbyist?

A

A person hired by a company or an industry to represent its interests with government officials.

44
Q

What is a Trade Association

A

An organization dedicated to promoting the interests and assisting the members of a particular industry.

45
Q

What essential services does the federal government provide to facilitate business activity in Canada?

A

The federal government provides highways, the postal service, minting of money, the armed forces, and statistical data for business decisions. It also maintains stability through fiscal and monetary policy.

46
Q

What are public-private partnerships (P3s), and what role do they play in providing essential services?

A

P3s are partnerships where the government pays a private-sector company to build, finance, and operate organizations such as hospitals and transit lines. They are used to provide essential services but tend to cost more than traditional government-funded projects.

47
Q

what is demand

A

The willingness and ability of
buyers to purchase a product
or service.

48
Q

what is supply

A

The willingness and ability of
producers to offer a good or
service for sale.

49
Q

what is the law of demand

A

The principle that buyers will
purchase (demand) more of a
product as the price drops.

50
Q

what is the law of supply

A

The principle that producers
will offer (supply) more of a
product as the price rises.

51
Q

what is the demand and supply schedule

A

Assessment of the
relationships between different
levels of demand and supply at
different price levels.

52
Q

What is Market price (equilibrium price)

A

Profit-maximizing price at which the quantity of goods demanded and the quantity of goods supplied are equal.

53
Q

What is a surplus

A

A situation in which quantity supplied exceeds quantity demanded.

54
Q

What is a private enterprise

A

An economic system characterized by private property rights, freedom of choice, profits, and competition.

55
Q

What is a shortage in the context of supply and demand?

A

A shortage happens when the quantity demanded exceeds the quantity supplied, meaning that not enough products are available to meet customer demand.

56
Q

How can a surplus affect a business’s profitability?

A

A surplus leads to unsold products, causing the business to lose money that was spent on producing those extra goods, reducing overall profitability.

57
Q

What are the four key elements required for a private enterprise system?

A

The four key elements are private property rights, freedom of choice, profits, and competition.

58
Q

What are private property rights in a private enterprise system?

A

Private property rights allow individuals to own and control the resources they use to create wealth, including land, buildings, and other assets.

59
Q

How does “freedom of choice” function in a private enterprise system?

A

Freedom of choice means individuals can sell their labor to any employer, choose which products to buy, and producers can decide whom to hire and what to produce.

60
Q

Why are profits important in a private enterprise system?

A

Profits provide an incentive for individuals to start their own businesses and take risks, as they offer the potential for financial reward.

61
Q

How does competition influence businesses in a private enterprise system?

A

Competition occurs when two or more businesses compete for the same resources or customers. It motivates businesses to operate efficiently, improve their products, and lower prices to attract customers.

62
Q

What is perfect competition

A

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.

63
Q

What is monopolistic competition

A

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.

64
Q

What is an oligopoly

A

A market or industry characterized by a small number of very large firms that have the power to influence the price of their product or resources.

65
Q

What is a monopoly?

A

A market or industry with only one producer that can therefore set the prices of its products and resources.

66
Q

Give examples of oligopoly

A

Nintendo, Sony, and Microsoft have been going head to head for years. The industry was worth approximately US$115 billion in 2018 and was projected to grow to $138 billion by 2021.

67
Q

What is supply management

A

has some of the characteristics of a monopoly. Domestic production quotas are established for commodities such as dairy products, maple syrup, eggs, chickens, and turkeys. Producers of these commodities are not allowed to produce more than the quota they have been granted. To prevent foreign competitors from entering the market, high tariffs are charged on imports of these commodities (e.g., the tariff on butter is 299percent; on cheese, 246percent; and on milk, 241percent)

MGM101 (8 decks)

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