Unit One Test Review
Classifications of Businesses:
For-profit
- An organization that produces or sells good or services to satisfy the need wants and
demands or consumers
- Formula for For-profit: Profit or loss = revenue - expenses (wages and assets used up in a
process) and costs (money at each stage of production such as materials)
Non-profit
- Raises funds for a specific goal instead of seeking profit
- Charities and charitable organizations
- For the good of the community
Not-for-profit
- Don’t seek profit
- Any surplus funds are used to improve the services of members
- Goal is to meet the needs of specific members
Size of Business
- Large: Business that has 500+ employees
- Small or medium: Business that has less than 500 employees
Forms of Business Ownership
- On pages 4-5
Goods or Services
- Goods are physical things that can be bought
- Services are things that can be provided to you by doing something for you
Channels of Distribution
- How is delivers goods
- Bricks and mortar is when you have to go to a physical location to purchase
- Can order things online (e-commerce) or sell things through the phone or catalogues
Role in the Community
- Can be classified by the role it has in the community or the function it has
Jobs
- Different jobs it provides (cashier, chef, manager)
Products vs. Consumer:
- Products: are the businesses that offer goods and services that consumers need and want
- Consumer: are the people who purchase goods and services from producers
- Market place: the place where producers and consumers come together to buy and sell their
goods and services
Consumers Influence on Products:
- Consumers buys from businesses that meet their needs and wants
- Consumers dictate what businesses sell because of competition
When Products Become Obsolete:
- When a product is no longer purchased by consumers because they don't need or want it, it
becomes obsolete
,Consumer Influence on Price:
- When consumers have pricing power, they influence the prices of goods and services
- They have power because they look elsewhere for goods and services
- When the producer is setting the price, they consider what the customer is willing and able
to pay for it and the costs of making the product
- Similar products are in the same price range has competitor’s products
Consumer Influence on Service:
- Consumer purchasing power gives the individual the control to buy goods and services at the
price they want, at the location they like, and the service levels that business offer to the
consumer
- If the consumers decide not to buy the product, it may become obsolete
Consumer Needs and Wants:
- Needs: things that are necessary for survival
- Wants: things that are not necessary for survival, but add comfort and pleasure in our lives
- Knowing consumer’s needs and wants is crucial for opening a business
- Depending on the situation, an individual’s needs or wants can be different than our own
- Abraham Maslow created the hierarchy of needs
- Purple → self-actualization (need for self-fulfillment, to
grow or achieve self potential, e.g. hobbies, education, travel)
- Green → self-esteem (self-respect, respect from others, e.g.
acknowledgement of success)
- Yellow → love and belonging (need for love, affection, and
belonging, e.g. friendship, acceptance by others)
- Orange → safety and security (need for security, family
stability, e.g. insurance, job security)
- Red → physiological needs (basic human needs for survival,
e.g. water, food)
Attracting Consumer Interest:
- Improving the existing product or create something new
- Promote the latest trends with advertisements
- Compete with similar businesses
- Producers consider: necessity, location, money, variety of the product, sales
- They can retain all this information through surveys
Making Good Business Decisions:
1. Determine the decision that needs to be made based off the situation
2. Identify the alternatives
3. Evaluate the advantages and disadvantages of each alternative
4. Make and implement the decision. Be sure you can backup your decision with evidence and
come to the most logical decision.
5. Evaluate the decision. Predict how the business will do in short-term, and long-term.
, Economic Resources:
- AKA factors of production
- The things that goods are made out of or things that allow a business to provide a service
Natural resources:
- materials that come from the earth, water, and air (e.g. fish, trees)
- Usually non-renewable
- Business are restricted on what they can produce
Human resources:
- Referred to as labour
- The people who work to create the goods and services (e.g. farmers, factory worker)
Capital resources:
- The goods used to produce other goods and services (e.g. factories, money)
Interdependence:
- They rely on the goods and services from a variety of business to satisfy consumer needs and
wants
- E.g. a fast food restaurant relies on natural resources from markets to attain beef, lettuce, or
tomatoes using capital resources such as money. Then the business must hire human
resources such as chefs, cashiers, servers
Economic Systems:
- Way of dealing with the selection, production, distribution, and consumption of goods and
services
- When there are unlimited wants but limited resources, there is scarcity
- There are three key questions to lead you through the process
1. What goods and services should be produced within the system?
2. For whom should these goods and services be produced?
3. How should these goods and services be produced?
- Three types of economic systems
Controlled economy:
- All production and sales of goods and services are controlled and owned by the government
Market economy:
- All production and sales of goods and services are determined by the producers and
consumers
Mixed economy:
- Canada is a mixed economy because we have characteristics of market and controlled
economy
Demand:
Classifications of Businesses:
For-profit
- An organization that produces or sells good or services to satisfy the need wants and
demands or consumers
- Formula for For-profit: Profit or loss = revenue - expenses (wages and assets used up in a
process) and costs (money at each stage of production such as materials)
Non-profit
- Raises funds for a specific goal instead of seeking profit
- Charities and charitable organizations
- For the good of the community
Not-for-profit
- Don’t seek profit
- Any surplus funds are used to improve the services of members
- Goal is to meet the needs of specific members
Size of Business
- Large: Business that has 500+ employees
- Small or medium: Business that has less than 500 employees
Forms of Business Ownership
- On pages 4-5
Goods or Services
- Goods are physical things that can be bought
- Services are things that can be provided to you by doing something for you
Channels of Distribution
- How is delivers goods
- Bricks and mortar is when you have to go to a physical location to purchase
- Can order things online (e-commerce) or sell things through the phone or catalogues
Role in the Community
- Can be classified by the role it has in the community or the function it has
Jobs
- Different jobs it provides (cashier, chef, manager)
Products vs. Consumer:
- Products: are the businesses that offer goods and services that consumers need and want
- Consumer: are the people who purchase goods and services from producers
- Market place: the place where producers and consumers come together to buy and sell their
goods and services
Consumers Influence on Products:
- Consumers buys from businesses that meet their needs and wants
- Consumers dictate what businesses sell because of competition
When Products Become Obsolete:
- When a product is no longer purchased by consumers because they don't need or want it, it
becomes obsolete
,Consumer Influence on Price:
- When consumers have pricing power, they influence the prices of goods and services
- They have power because they look elsewhere for goods and services
- When the producer is setting the price, they consider what the customer is willing and able
to pay for it and the costs of making the product
- Similar products are in the same price range has competitor’s products
Consumer Influence on Service:
- Consumer purchasing power gives the individual the control to buy goods and services at the
price they want, at the location they like, and the service levels that business offer to the
consumer
- If the consumers decide not to buy the product, it may become obsolete
Consumer Needs and Wants:
- Needs: things that are necessary for survival
- Wants: things that are not necessary for survival, but add comfort and pleasure in our lives
- Knowing consumer’s needs and wants is crucial for opening a business
- Depending on the situation, an individual’s needs or wants can be different than our own
- Abraham Maslow created the hierarchy of needs
- Purple → self-actualization (need for self-fulfillment, to
grow or achieve self potential, e.g. hobbies, education, travel)
- Green → self-esteem (self-respect, respect from others, e.g.
acknowledgement of success)
- Yellow → love and belonging (need for love, affection, and
belonging, e.g. friendship, acceptance by others)
- Orange → safety and security (need for security, family
stability, e.g. insurance, job security)
- Red → physiological needs (basic human needs for survival,
e.g. water, food)
Attracting Consumer Interest:
- Improving the existing product or create something new
- Promote the latest trends with advertisements
- Compete with similar businesses
- Producers consider: necessity, location, money, variety of the product, sales
- They can retain all this information through surveys
Making Good Business Decisions:
1. Determine the decision that needs to be made based off the situation
2. Identify the alternatives
3. Evaluate the advantages and disadvantages of each alternative
4. Make and implement the decision. Be sure you can backup your decision with evidence and
come to the most logical decision.
5. Evaluate the decision. Predict how the business will do in short-term, and long-term.
, Economic Resources:
- AKA factors of production
- The things that goods are made out of or things that allow a business to provide a service
Natural resources:
- materials that come from the earth, water, and air (e.g. fish, trees)
- Usually non-renewable
- Business are restricted on what they can produce
Human resources:
- Referred to as labour
- The people who work to create the goods and services (e.g. farmers, factory worker)
Capital resources:
- The goods used to produce other goods and services (e.g. factories, money)
Interdependence:
- They rely on the goods and services from a variety of business to satisfy consumer needs and
wants
- E.g. a fast food restaurant relies on natural resources from markets to attain beef, lettuce, or
tomatoes using capital resources such as money. Then the business must hire human
resources such as chefs, cashiers, servers
Economic Systems:
- Way of dealing with the selection, production, distribution, and consumption of goods and
services
- When there are unlimited wants but limited resources, there is scarcity
- There are three key questions to lead you through the process
1. What goods and services should be produced within the system?
2. For whom should these goods and services be produced?
3. How should these goods and services be produced?
- Three types of economic systems
Controlled economy:
- All production and sales of goods and services are controlled and owned by the government
Market economy:
- All production and sales of goods and services are determined by the producers and
consumers
Mixed economy:
- Canada is a mixed economy because we have characteristics of market and controlled
economy
Demand:
