unit 1 Flashcards
define business
- an organization that produces or sells goods or services
- satisfies the needs, wants, and demands of consumers
- exists to make a profit
define economic system
is the way government and business work together to provide goods and services to the country’s people
needs vs wants
- NEED: an item that is necessary for survival
- WANT: an item not necessary for survival, but adds pleasure and comfort to life
goods vs services
- GOODS: items with value that people buy - eg. car
- SERVICES: things provided by workers that people pay for - eg. hair salon
tangible vs intangible
- TANGIBLE: product you can touch and see
- INTANGIBLE: do not result in a product you can touch
franchisee
is a business owner who is licensed to operate a branded outlet of a retail chain
cooperative
owned by the people who buy or use the products or services sold
- each member has one vote in how business is run, while governed by a board of directors
- less expensive to set up and allow for bulk buying
essential goods and services
products that satisfy needs for survival
- eg. food, clothing, shelter, heating, lighting, water
luxury goods and services
products that satisfy wants or enjoyment
- eg. jewelry, cellphones, dry cleaning
economic resources
- also known as factors of production
- goods/services are created from basic components
- are the means that create goods and services
natural resources
include raw materials that come from earth - eg. soil
private corporation
a company that is owned by one person or a small group of people
capital resources
human-made resources that aid in the production of a good or service, includes money to buy natural and other capital resources and pay for human resources - eg. buildings
human resources
“labour”, the people who create the foods and services from the natural resources - eg. construction worker
producer vs consumer
producers sell and consumers buy
supply and demand
- supply is the amount of goods and services that producers can/willing to provide
- demand is the quantity of goods and services that consumers are willing to buy
profit
is the income leftover after all costs and expenses are paid
revenue
is the money received from the sale of goods and services
expenses
is any money spent in creating revenue for a business - eg. wages, delivery truck
costs
any money spent on each stage of production - eg. raw materials
franchiser
the person who licenses the rights to their name, procedures, designs, and expertise to another business
obsolete
no longer produced or used; out of date
market economy
in a pure market economy, individuals are:
- encouraged to make a profit
- free to own private property
- allowed freedom of choice when selecting a product or way of life.
crown corporation
organizations owned by the federal or provincial government
command economy
- the government owns the natural resources, farms, factories, machinery, offices and most businesses
- the government possesses all decision making ability, including wages and benefits
- eg. North Korea
mixed economy
- no economy is pure, but a mix of market and command
- the government will decide to contain elements of both models in varying degrees
manufacturing business
produces products for retailers
debt vs equity financing
- borrowing from a bank is known as debt financing
- borrowing from investors or your savings is known as equity financing
retail business
sells products bought from manufacturers
shareholder
any person, company, or institution that shares in a company’s stock
partnership agreement
outlines how profits and losses will be allocated and who has what responsibilities
gentrification
the transformation of a neighbourhood from low value to high value
unlimited liability
if a business fails due to heavy losses, personal assets can be used to pay back creditors
service business
satisfy needs and wants by providing a service
public corporation
a company whose shares are listed to be traded on a public market
what is a non-profit organization? give 2 examples
services provided by volunteers, unpaid work, usually a charitable organization that helps those in need
- eg. United Way
what are the three types of economic resources? provide an example for each
- natural resources - eg. soil
- human resources - eg. construction worker
- capital resources - eg. buildings
what is the law of demand?
when price goes up, demand goes down - when price goes down, demand goes up
what are the four conditions that create demand?
- consumer must be aware that the product exists
- producer must have enough supply of the product
- the product must be reasonably prices
- the product must be accessible and easy to obtain
what are the found factors that affect demand?
- income
- change in consumer taste
- future expectations
- population
what is the law of supply?
as price increases the amount of goods/services are increased - vice versa
what are the conditions that affect supply
- cost of production
- change in number of producers
- price of related goods
- change in technology
- future expectations
how is price affected by supply and demand?
price changes because supply and demand changes
- demand high, supply low = higher prices
- demand low, supply high = lower prices
what are the six factors that influence consumer buying decisions?
- income an price
- status
- current trends
- customs and habits
- safety
- promotion
what are the types of businesses? give 2 examples for each
- manufacturing - eg. ford
- retail - eg. walmart or shoppers
- service - eg. mcd or air canada
what are the types of business ownerships? explain using advantages and disadvantages
- SOLE PROPRIETORSHIP
- owned by one person
- they benefit or suffer depending on profits or losses
- owner has unlimited liability - PARTNERSHIPS
- operated by two or more people who have entered a partnership agreement which outlines how profits/losses will be allocated and who has what responsibilities
- complimentary skills can be used in a partnership to enhance profitability - CORPORATIONS
- a type of business whose ownership is divided into many small parts called stock or shares
- can be set up provincially or federally
- have limited liability and are treated like a separate individual - FRANCHISES
- offer brand recognition in exchange for a percent of the company
- fees are expensive but rarely go out of business
what are the types of partnerships?
general and limited
- general is where all people share unlimited liability for each others actions
- limited is where partners are only responsible for the amount they invested, personal assets cannot be touched
what is the different between public, private, and crown corporation?
- private means only a few people control the shares
- public is where stocks are listed on a stock exchange, and anyone can buy shares
- crown is operated by the provincial or federal government - eg. CBC
what is privatization? give an example of a company becoming privatized in Canada
- occurs when a public business is sold to the private sector
- occurs when the government feels that they are losing too much money or the private sector can do a better job
- eg. air canada
in what forms do business tax dollars get recycled into our communities
healthcare, education, public services in our municipal government
