What factors must business managers pay attention to?
They must pay attention to the actions of competitors, rapid technological change, new product development, corporate strategy, risk management, and stock prices.
Business: an organization that seeks to earn profits by providing goods and services.
Profit: what remains after a business’ expenses have been subtracted from its revenues.
Not-for-profit organizations: use the funds they receive to provide services to the public. Ex. charities, educational institutions, churches, hospitals, labour unions
Economic Systems Around the World
What are Factors Of Production?
They are basic resources that a country’s businesses use to produce goods and services. Such as: Labour, Capital, Entrepreneurs and Natural Resources.
Labour: people who work for a company, mental and physical capabilities of people.
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 such as 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 achieve its goals.
Types of Economic Systems
There are different ways in which economic systems manage the factors of production.
Command Economy: gov’t controls all or most factors of production and makes all or most production decisions. Ex. Communism and Socialism. (communism, u have no choice of anything. socialism, taxes are high but they have democracy and an opinion)
Market Economy: individuals control all or most factors of production and makes all or most production decisions. Ex. Canada where we can bargain prices and decide where to buy our stuff from (multiple prices at multiple stores and we get to choose if we buy from winners or walmart)
Mixed Market Economies: an economic system with elements of both a command economy and a market economy.
Privatization: the transfer of activities from the gov’t to the private sector. (private or public businesses; private you can’t buy shares, public you can)
Nationalization: the conversion of private firms into gov’t-owned firms.
Interactions Between Business and Gov’t
Theres no competition if theres collusion where businesses call each other up and make deals on prices and such