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RSM100 - Chapter 1.
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Exam of 8 pages for the course Chem 1020. at Chem 1020. (RSM100 - Chapter 1.)
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RSM100 - Chapter 1What is business? - ANS-all profit-seeking activities and enterprises that provide goods
and services necessary to an economic system
What is profit? - ANS-rewards for businesspeople who take the risks involved in offering
goods and services to customers
what are not-for-profit organizations, and what are the primary objectives? -
ANS-organizations whose primary aims are public service, not returning a profit to their
owners
what does a growing economy mean? - ANS-an economy that produces more goods
and services, but uses fewer resources over time
Why are growing economies important? - ANS-they yield more income for business
owners, their employees, and shareholders.
What is at the heart of every business? - ANS-an exchange between a buyer (has a
need for a good/service) and a seller (hopes to gain a profit)
Difference between accounting profit and economic profit? - ANS-Accounting profit: the
difference between a firm's revenues and expenses it incurs in generating these
revenues
Economic profit: can serve as a incentive for people to start companies
Do not-for-profit organizations operate in private or public sectors? - ANS-both (private -
museums, libraries, trade associations; public - government agencies, political parties,
labour unions)
What is the similarities between not-for-profit organizations and for-profit businesses? -
ANS-Both need funding to do research, obtain raw materials/resources, and provide
service/products to communities, and reach their social goals
What are the 4 factors of production? - ANS-1. natural resources (agricultural land,
building sites, forests)
2. capital (technology, tools, info, and physical facilities)
3. human resources (anyone who works, labour)
4. entrepreneurship (the willingness to take risks to create and operate a business)
, What are the factor payments (types of payments received by firms and individuals who
supply them) for each of the four factors of production? - ANS-1. Natural resources -
rent for land leased for operations
2. capital - interest for money used to acquire capital items
3. human resources - wages for employees
4. entrepreneurship - profit for starting and managing operations
What is the private enterprise system? - ANS-An economic system that rewards firms
for their ability to identity and serve the needs and demands of customers.
What is competitive differentiation? - ANS-The unique combination of organizational
abilities, products, and approaches that sets one company apart from its competitors in
the minds of customers.
What are the 4 basic rights in the private enterprise system? - ANS-1. private property
2. competition
3. profits
4. freedom of choice
Because private enterprise system allows for fair competition, what has the government
done to support this? - ANS-they have passed laws to prohibit excessively aggressive
competitive practices designed to remove the competition.
What percentage of new businesses created in Canada are small businesses? -
ANS-99%
What percentage of all businesses employ fewer than 5 employees, and fewer than 50?
- ANS-5%; 95%
What percentage of new jobs are generated by the small business sector? - ANS-80%
What does entrepreneurship create? - ANS-creates jobs and sells products; leads to
innovation
What does entrepreneurship do to existing companies? - ANS-bring new ideas,
enhance flexibility, improved innovation and new market opportunities
What is an alternative term for the private enterprise system? - ANS-Capitalism
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