BAM101 2015-01-20 Economics Evolving Systems · 2 January 19 Economics: Evolving Systems 1 3...
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www.forint.ca Economics: Evolving Systems BAM101 2015-01-20 Peter Forint BA, MBA, GBM
Transcript of BAM101 2015-01-20 Economics Evolving Systems · 2 January 19 Economics: Evolving Systems 1 3...
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Economics: Evolving SystemsBAM101 2015-01-20
Peter Forint BA, MBA, GBM
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Proposed Agenda
l Quick Recap– Introductions– Basic Rules– Email
l Emergenciesl Blackboard Course Tourl Chapter 1l Summaryl Quiz Next Class
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Emergencies
(416) 491-5050 x 88Seneca Security
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Typical Class Format
l In the newsl Quizl Review of last lecture plus questionsl Learning outcomes for new lecturel Key conceptsl Application-video, group exercise, case, or
questions from text, etc.l Summary & reviewl Comment re next class or assignment
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BAM101 Topic Outline Addendum
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Wk WeekOf Topic Chpt Evaluation1 January12 IntroductiontoBAM101
LinkedIn2 January19 Economics:EvolvingSystems 13 January26 UnderstandingMoneyandtheCanadian
FinancialSystem2
4 February2 Politics:Governments’Roles 35 February9 Social:Society,Corporate
Responsibility,andMakingEthicalDecisionsTechnology:ManagingInformationforBusinessSuccess
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6 February16 International:TheGlobalMarketplace 6
7 February23 MIDTERMEXAM MidTermExaminclass;chapters1-6 Value:25%
8 March2 STUDYWEEK-NOCLASSES(Collegeopen)
9 March9 EntrepreneurshipandSmallBusiness 7 BusinessNewsResearchandCitationTutorial(5%)andMajorResearchAssignmentdueonlineSunday,March15,Value:20%
10 March16 FormsofBusinessOwnership 811 March23 ManagementandLeadership 9
12 March30 AnalyzingtheBusiness 1013 April6 Finance:MaximizingtheValue 1214 April13 ComprehensiveReview15 April20 FINALEXAMWEEK
(DateandlocationTBA)ComprehensiveFinalExam;Value:30%
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BAM101 Topic Outline Addendum
l More deliverables TBD (To Be Determined)l Quizl LinkedIn Assignmentl Etc.
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Steam Whistle Brewing Co.
Several organizational behaviour practices have contributed to Steam Whistle Brewing Co.’s success, such as leadership, human capital, diversity, and organizational effectiveness.
Canadian OB 8e McShane/Steen © 2012 The McGraw-Hill Companies, Inc. All rights reserved4
About Slides
l Standard Slides from Publisherl Slides from Peter Forintl Slides from other professors
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Frank Stronach
l From one man shop to billionaire
l “Fair Enterprise” philosophy introduced in 1971:– Workers become owners– Managers become partners– Austrian-Canadian
13Sources: http://www.fraserinstitute.org
Whydosomanypeople—especiallymoresuccessfulpeople—findsmartphoneuseinmeetingstobeinappropriate?It’sbecausewhenyouaccessyourphoneitshows:
Lackofrespect.Youconsidertheinformationonyourphonetobemoreimportantthantheconversationinthemeeting;youviewpeopleoutsideofthemeetingtobemoreimportantthanthosesittingrightinfrontofyou.
Lackofattention.Youareunabletostayfocusedononeitematatime;theabilitytomultitaskisamyth.
Lackoflistening.Youaren’tdemonstratingtheattentionandthinkingthatisrequiredoftrulyactive listening.
Lackofpower.YouarelikeamoderndayPavlovian dogwhorespondstothebeckandcallofothersthroughthebuzzofyourphone.
http://www.forbes.com/sites/kevinkruse/2013/12/26/why-successful-people-never-bring-smartphones-into-meetings/
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About Slides: Peter’s Mod’s
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Organizational Behaviour and Organizations
§ Organizational behaviour• The study of what people
think, feel, and do in and around organizations
§ Organizations• Groups of people who work
interdependently toward some purpose
• Collective entities• Collective sense of purpose
Canadian OB 8e McShane/Steen © 2012 The McGraw-Hill Companies, Inc. All rights reserved11
LO1: Organizational Behaviourand Organizations
§ Organizational behaviour• The study of what people
think, feel, and do in and around organizations
§ Organizations• Groups of people who work
interdependently toward some purpose
• Collective entities• Collective sense of purpose
Canadian OB 8e McShane/Steen © 2012 The McGraw-Hill Companies, Inc. All rights reserved1
Steam Whistle is one of Peter’s favourites!
JustbecauseIDOtalkaboutitinclass
DoesnotmeanitwillbeontheExam(s)!
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JustbecauseIDON’T talkaboutitinclass
DoesnotmeanitwillnotbeontheExam(s)!
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NETA PowerPoint Presentations to accompany
The Future of BusinessFourth Edition
Adapted by Norm Althouse,
University of Calgary
Copyright © 2014 by Nelson Education Ltd.
Economics: Evolving Systems
Chapter 1
Copyright © 2014 by Nelson Education Ltd.
Making the Connection
Learning Outcomes1. Explain what economics is and how the three sectors of the
economy are linked. 2. Understand the primary features of the world’s economic
systems.3. Explain the four types of market structure.4. Discuss the basic microeconomic concepts of demand and
supply, and how they establish prices.5. Show how economic growth, full employment, and price
stability indicate a nation’s economic health.6. Describe how the Bank of Canada uses monetary policy, and
how governments use fiscal policy to achieve their macroeconomic goals.
7. List some of the trends that are reshaping micro- and macroeconomic environments.
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Basic Terms} Economics – The study of how a society uses scarce
resources to produce and distribute goods and services.
} Microeconomics – The sub-area of economics that focuses on individual parts of the economy, such as households or firms.
} Macroeconomics – The sub-area of economics that focuses on the economy as a whole by looking at aggregate data for large groups of people, companies, or products.
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Business and Economies Working Together
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… who decides the answers determines the type of economy
Factors of Production
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Resources Used to Create
Products
Natural Resources
Labour
Capital
Knowledge
Entrepreneurship
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Factors of Production
Source: McGraw-Hill Ryerson 18
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Factors of Production
Which do you think is most important?
Why?
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Exhibit: Economics as a Circular Flow
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Economic Systems
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Aneconomicsystemisthecombinationofpolicies,laws,andchoicesmadebyanation’sgovernmentstoestablishthesystemsthatdeterminewhatgoodsandservicesareproducedandhowtheyareallocated.
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Economic Systems
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Source: McGraw-Hill Ryerson
Economic Systems
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l Capitalism:individualsseekingprofitsproducegoodsandservices.– Goodsandservicesaresoldinafreemarkettothosewhocanpayforthem.
l Communism:thegovernmentdecideswhatwillbeproducedandwhowillconsumetheresultsofthatproduction.
l Socialism:somefreemarketandsomegovernmentallocation.
l Mostcountrieshaveamixedeconomy.
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Source: McGraw-Hill Ryerson
Three Economic Systems
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Communism
Socialism
Capitalism(Highly Controlled) (Little Control)
Mixed
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Source: McGraw-Hill Ryerson
Capitalism
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l Aneconomicsysteminwhichallormostofthefactorsofproductionanddistribution(e.g.,land,factories,railroads,stores)areprivatelyowned(notownedbythegovernment)andareoperatedforprofit.
l Capitalism isthepopulartermusedtodescribefree-marketeconomies.
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Source: McGraw-Hill Ryerson
Capitalism: Free-market
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Thefreemarketisoneinwhichdecisionsaboutwhattoproduceandinwhatquantitiesaremadebythemarket.
—thatis,bybuyersandsellersnegotiatingpricesforgoodsandservices.
Nocountryispurelycapitalist;nomarketistrulyfree.
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Source: McGraw-Hill Ryerson
Socialism
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l Socialismisaneconomicsystembasedonthepremisethatsome,ifnotmost,basicbusinesses,suchassteelmills,coalmines,andutilities,shouldbeownedbythegovernmentsothattheprofitscanbeevenlydistributedamongthepeople.
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Source: McGraw-Hill Ryerson
Communism
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l Communism is an economic and political system in which the state (the government) makes almost all economic decisions and owns almost all of the major factors of production.
l Communism affects personal choices more than socialism does.
l Some communist countries have not allowed their citizens to practice certain religions, change jobs, or move to the town of their choice.
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Source: McGraw-Hill Ryerson
Market Structures
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l Back to Capitalism…
LO3: Competing in a Free Market
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Source: McGraw-Hill Ryerson
LO3: Market StructuresHow many sellers?
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One Seller Many Sellers
Monopoly OligopolyMonopolistic Competition
Perfect Competition
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Source: McGraw-Hill Ryerson
Oligopoly
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l An oligopoly occurs when a few sellers dominate a market.
l Oligopolies exist in industries that produce products in the areas of oil and gas, tobacco, automobiles, aluminum, and aircraft.
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Source: McGraw-Hill Ryerson
Oligopoly
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l Oligopoly: One reason some industries remain in the hands of a few sellers is that the initial investment required to enter the business is tremendous – like the airline industry.
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Source: McGraw-Hill Ryerson
Monopoly
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l A monopoly occurs when there is only one seller for a good or service, and that one seller controls the total supply of a product and the price.
l Traditionally, monopolies were common in areas such as water, electricity, and telephone services that were considered essential services.
L04: Equilibrium
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EquilibriumThe quantity of a product
demanded equals the quantity supplied.
Exhibit : Equilibrium Price and QuantityThe number of snowboarder jackets produced and bought at $80 will tend to rest at equilibrium unless there is a shift in either demand or supply.
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Source: McGraw-Hill Ryerson
“Supply & Demand”
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Supplyreferstothequantityofproductsthatmanufacturersorownersarewillingtosellatdifferentpricesataspecifictime.
Generallyspeaking,theamountsuppliedwillincreaseasthepriceincreasesbecausesellerscanmakemoremoneywithahigherprice.
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Source: McGraw-Hill Ryerson
“Supply & Demand”
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l Demandreferstothequantityofproductsthatpeoplearewillingtobuyatdifferentpricesataspecifictime.
l Generallyspeaking,thequantitydemandedwillincreaseasthepricedecreases.
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Source: McGraw-Hill Ryerson
Equilibrium Point
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Theplacewherequantitydemandedandsuppliedmeetiscalledtheequilibriumpoint.
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Source: McGraw-Hill Ryerson
Equilibrium Point & Market Price
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Inthelongrun,thatpricewouldbecomethemarketprice
Marketprice,then,isdeterminedbysupplyanddemand
Changes in Demand and Supply
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LO6 Macroeconomics: The Big Picture
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l Economic Growth: An increase in a nation’s output of goods and services
l Gross Domestic Product (GDP): The total market value of all final goods and services produced within a nation’s borders in a year
l Gross National Product (GNP): The total market value of all final goods and services produced within a nation’s borders in a year, regardless of location
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LO6 Macroeconomics: The Big Picture
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l Business Cycles: Upward and downward changes in the level of economic activity
l Recession: A decline in GDP that lasts for at least two consecutive quarters
l Boom: Increase in economic activity
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Unemployment Rate
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l Frictional: Short term, always there, unrelated to business cycle
l Structural: Mismatches not part of business cycle
l Cyclical: When whole economy is downl Seasonal: Industry specific seasons
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Inflation
44http://www.statcan.gc.ca/daily-quotidien/141219/dq141219a-eng.htm
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“There are three kinds of lies: lies, damned lies, and statistics.”
– Mark Twain 45
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Williams Annual Consumer Inflation
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LO6: Macroeconomic Main Goals
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Striving for Economic Growth
Full Employment
Price Stability
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l Bank of Canadal Monetary Policy
– Contractionary vs. Expansionaryl Fiscal Policy
Monetary vs Fiscal Policy
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l Canadians must wait until at least April to see if Ottawa can afford billions of dollars in promised tax breaks and new spending on families.– Toronto Star– 2015-01-15
Joe Oliver postpones federal budget as oil price plummets
LO7: The Future of Economics
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} Lackofconfidenceinthemarkets.
} Meetingcompetitivechallenges.
} Increasingentrepreneurshipworldwide.
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Learning Outcomes
1. Explain what economics is and how the three sectors of the economy are linked.
2. Understand the primary features of the world’s economic systems.
3. Explain the four types of market structure.4. Discuss the basic microeconomic concepts of demand
and supply, and how they establish prices.5. Show how economic growth, full employment, and price
stability indicate a nation’s economic health.6. Describe how the Bank of Canada uses monetary policy,
and how governments use fiscal policy to achieve their macroeconomic goals.
7. List some of the trends that are reshaping micro- and macroeconomic environments. 51
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Next Class
l Quiz– 10 multiple choice questions in 10 minutes
l Money and the Canadian Monetary System
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