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Needs: An item necessary for survivalWants: An item not necessary for survival, adds pleasure & comfort to lifeGoods:

Items with monetary value which can be seen and touchedServices: Assistance provided, usually in return to payment. Cannot be touchedProducers: Individuals and/or businesses that make a productConsumers: Persons who buy goods and services (customers) Supply: The amount of goods & services a business is willing and able to sellDemand: The willingness and ability of consumers to pay for a product / serviceSurplus: Too much supply, not enough demandShortage: Not enough supply, too much demandMaslow sHierarchy of Needs: Physiological, Biological Needs, Safety, Belonging, Esteem, Self-Actualization Demand: As price increases, demand decreasesFactors Affecting Demand (will shift curve left / right on graph): Income: Increases or decreases in the amount of money people haveTastes & Preferences: Individuals likes, quality, price of alternative productsSupply: As price increases, supply increases. Factors Affecting Supply (will shift curve left / right on graph): (others) Costs of Inputs: Total costs of producing & selling good will affect how much will be suppled at different pricesCompetition: Increases and decreases in the number of businesses selling a certain product will affect the amount of the product / service being soldEquilibrium: Where demand & supply curves intersect.Specialization: Concentration of efforts on a specific task / activity Division of Labour: When work is split amongst many people so that it can be done fasterInterdependence: When people / businesses rely on the products / services provided by other people / businesses to satisfy their needs & wantsIndustrial Revolution: Began in late 1700s (Great Britain) Types of Industries: Primary: Require large amounts of capital and investment. Products extracted from natureSecondary: Manufacturing of materials into finished products. Usually requires greater amounts of capital & investment due to automation and large amounts of production. Tertiary: Provide sales, service, and distribution to businesses & consumers. Have the greatest % of employment.Types of Businesses: Sole Proprietorship: Oneowner Partnership: Two or more owners with a written partnership agreementCorporation: A legal person with shareholders, separate from its ownersCo-Operative: Owned by the workers / members who buy from the business, each person has one vote, regardless of # of shares, has a board of directors. Motivated by service, not profit. Franchise: Hybrid type of ownership, business licenses someone to use its name, operating procedure, goods, etc Can have any form of ownership Advantages/Disadvantages of Sole Proprietorship Be your own boss Easy to start & end All profit to owner Unlimited Liability Financing may be difficult Owner may not completely know how to run a businessPartnership More capital & financing Shared Responsibilities (take advantage of each others skills) Unlimited Liability in General Partnerships Partner disagreementsCorporation Limited Liability Transfer of ownership simple Timely & costly setup Those with few shares have little sayCo-Operative Less expensive goods& services Easily set-up Decision making could be difficultFranchise Brand recognition Shared marketing Corporate training & support Franchise fee Monthly fee Must buy from franchiserCorporations Types: Private: Few people control shares Public: Public controls all / most of the shares Crown: Operated by provincial or federal government Municipal: Operated by municipal governmentThe Charter: Legal document which governs the companys operations, needed before company can become a corporationIncludes: Name of corporation, purpose of corporation, amount of capital that will be raised by corporation, location of corporation, and the names of the members setting up the corporationThe Shareholders: Ownership divided into shares, those who own shares are shareholders. All shareholders must attend annual meeting to make decisions (elect board of directors, review financial statements, ask questions of business, and make recommendations to the business) If shareholder cannot attend, he passes the voting privilege to another (usually member of the board), this is a proxy vote One share = one vote (to decide what company shall do)Board of Directors: Sets policies of company, determines what to produce, and decided how to use profit. Appoints executive (manages daily operations of business) Dividends: Annual payment of part of profit to shareholdersAmount for each shareholder determined by dividing amount of profit paid out by number of shares held by shareholdersEconomic Systems: Land, Labour, & Capital (equipment) 3 Economic Questions: What & How to produce, Who will receive (land, labour, capital)Free Enterprise (capitalism): Consumers & businesses make decisionsCommunism: Government is decision-makerMixed: Combination of consumers, businesses, & government make decisions Free Enterprise Freedom - for consumers Efficiency resources used wisely New Products variety Lower Prices competition Uneven distribution of wealth Consumers cant get product info Health risks (no one monitoring companies) Communism Many social services Basic needs met Resources used efficiently Little personal freedom Little incentive to grow Mixed Incentives & freedom Social services Consumer protection Higher taxes Less incentiveCompetition: Government creates competition (Crown Corporations) with private businesses to: Make sure all needs are met Develop Canadas resources in areas which would be uneconomical for private businesses to operateAssistance: Allows businesses to be free of tax (tax breaks) Gives incentives to grow (loans & grants) Provides statistics Provides research facilities (testing labs) Business Cycles: Trough: Economic activity lowest level, many unemployed, uneasy about economy, bankruptcies increase Recovery: Demand increases, more job opportunities, people spend more money Peak: Highest point in cycle, people invest, prices increase Recession: Market demands overestimated, lay-offs, brings cycle back to trough Depression: Unemployment high, prices low, businesses fail, economic activity reduced From trough to trough can take 8-10 years Inflation and interest calc CPI (consumer price index): new price-old price/old price x100assets=liabilities+owner's equity . total assets-total liabilities=total owner's equitySimple Int. =PRTComp. Int. =amount. x (1+i) ^nentrepreneur: aptitude, vision, risk tolerance, confidence, creativity, perseverance, initiative, integrity, passionInternational Business trade barriers: embargo, tariff/custom duties, subsidies, quota, government regulationFunctions of bus.: managing, marketing, human resources, production, finance Production/Manu: purchasing, processing, quality control, gradingFunct/areas of manag.: planning, organizing, directing, controlling. Corp.: private, public, crown, municipal &non profit. Types of research: consumer, market, motivational, pricing, competitive, prod. &advertisementBalance sheet: heading: 1. company name/who, 2. balance sheet, 3. when, left: assets: cash, accounts receivable, inventory, and building etc (order of liquid). Total assets. Right: liabilities: accounts payable, bank loan, mortgage= Total Liabilities, owners eq., total liabiliies and owners equityIncome Statement: revenue, total revenue, expenses, total expenses, (net loss (gross profit-expenses), net income, gross income, service business)(cost of goods sold , retail business) product life cycle: production intro, growth, maturity, decline, decision point, withdrawal. Primary data-you collect, secondary data- others collectFunction of money (medium of exchange simplifying trading, store of value-will not go bad and liquid, standard of value-worldwide usage and known value) Cheques (payee, drawee, drawer, amount, account No, date) Credit (creditor, debtor, credit rating, credit bureaus) Character, capacity, capital Marketing Price, Place, Product, Promotion.