Download - BE Ebert Ch01
CHAPTER 1
The Canadian Business System
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada
1-2
The Concept of Business and ProfitBusinesses produce or sell products in order to make a profit Profitthe money left over from revenues after a firm pays its expenses motivates individuals to engage in business activities
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada
1-3
Factors of ProductionCapital Factors of Production Natural -resources used by firms Resources to create goods & services Information Resources Labour (Human Resources)
Entrepreneurs
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada
1-4
Types of Economic Systems Command economiesCommunist Socialist
Market economies Mixed market economies
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada
1-5
The Communist Model
Government owns the factors of production and makes all decisions regarding distribution of resources
Government owns all industries, including essential services
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada
1-6
The Socialist Model
The government owns and operates all critical industries such as utilities & major institutions
Individuals own noncritical businesses
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada
1-7
Market EconomyEconomic basis is supply & demand Political basis is capitalism Ownership of the factors of production is open to all Buyers and sellers have freedom of choice The market is the mechanism for the exchange of goods and services
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada
1-8
The Mixed Market EconomyMixed market economy a combination of both freedom & government intervention Most countries have some form of mixed market economy
Privatization - converting government enterprises into private companies opposite is nationalization Deregulation reducing laws and government intervention affecting business activity
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada
1-9
Circular Flow in a Market Economy
FIRMSSupply products in output markets Demand resources in input markets
OUTPUT MARKETS Goods and Services
INPUT MARKETS:Labour Capital Entrepreneurs Physical resources Information resourcesBusiness Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
HOUSEHOLDS:Demand products in output markets Supply products in input markets
Copyright 2009 Pearson Education Canada
1-10
The Many Roles of GovernmentCustomer Regulator Competitor Taxation Agent Provider of Incentives Provider of Essential ServicesBusiness Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke Copyright 2009 Pearson Education Canada
1-11
Economic Administration and Regulation
The government manages and regulates business Textile Labelling Act Canada Water Act
Competition Act
Canadian Radio television and Telecommunications Commission (CRTC)
Environmental Contaminants Act Fisheries Act Tobacco Act Food and Drug Act Canadian Wheat Board Hazardous Products Act Canadian Transport CommissionCopyright 2009 Pearson Education Canada
Weights and Measures Act
Provincial Boards
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
1-12
How Business Influences GovernmentBusiness
Lobbyists
Trade Associations
Advertising
Government
Lobbyists must register to be in accordance with the Lobbyists Registration ActBusiness Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke Copyright 2009 Pearson Education Canada
1-13
Supply and DemandSupply and Demand Analysis for Pizzas $20 18 16 14 Price 12 10 8 6 4 2
Demand Curve Equilibrium Price and Quantity Supply Curve
100
500
1000Quantity
1500
2000
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada
1-14
Dealing with a Shortage
A shortage drives prices up.
Effects of a Shortage on Price $20 18 16 14 Equilibrium Price 12 Price B 10 8 6 4 2 100 500
Supply Curve B Supply Curve A Equilibrium Price A Demand Curve
1000Quantity
1500
2000
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada
1-15
Dealing with a SurplusEffects of a Surplus on Price
A surplus drives prices down
$20 18 Demand Curve 16 14 Equilibrium Supply Curve A Price 12 Price A 10 Supply Curve B 8 Equilibrium 6 4 Price B 2 100 500 1000 1500 2000Quantity
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada
1-16
Private EnterprisePrivate enterprise occurs in a market economy Under this system individuals Can own property Have freedom of choice Have the freedom to earn profits Have freedom to compete
Government interference is minimal
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada
1-17
CompetitionWhen businesses vie for the same resources or customers in a particular market or industry. Motivates business to operate efficiently Forces business to make products better or cheaper
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada
1-18
Degrees of Competition Perfect Competition Monopolistic Competition Oligopoly Monopoly
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada
1-19
Brief History of Business in CanadaThe Early Years The Factory System and the Industrial Revolution The Entrepreneurial Era The Production Era
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada
1-20
Brief History of Business in CanadaThe Sales and Marketing Eras The Finance Era The Global Era The Internet Era
Business Essentials, Fifth Canadian Edition, by Ebert, Griffin, & Starke
Copyright 2009 Pearson Education Canada