| Term | Definition |
|---|
| economic intitutions | persons and organizatons that use or represent the factors of productions |
| business organizations | a profit seeking enterprise that serves as the main linkbetween scarce resources and consumer satisfactions |
| sole proprietorship | a business owned and run by one person |
| unlimited liability | this means that the owner is personally and fully responsible for all loses and debt of the business |
| inventory | a stock of finished goods and parts in reserve |
| fringe benefits | employee benfits in addition to ways and salaries |
| limited life | means that when the owner dies, qurts, or sells the business the firm iyself legally ceases to exist |
| partnership | is a business jointly own by two or more persons |
| general partnership | one in which all partners are responsible for the mangemen and financial obligations of a business |
| limited partnership | at least one partner is not active in the daily running of the business, altough he/she may have contributed funds to finace the operations |
| articles of partnership | usually are drownup to specify arrangements between partners |
| limited liability | means that the investors responability for the debt of the business is limited by the size of his/her investment in the firm |
| coporation | is a form of business organization recongized by law as a seprate legal entitiy having all the rights of a individual |
| incoporate | form a corporation must file for permission from the natural goverment or the state where the business will have its headquarters |
| charter | a goverment docement document that gives permission to create a coporation- is granyed |
| stock | ownership parts of the firm |
| stockholders/shareholders | these shares are certificates of ownership and are solf to investors |
| dividend | a check reprensiting a portion of the corporate earnings or profits - to each stockholders |
| common stock | reprents basic ownership of a corporation |
| board of directors | whose duty is to direct the corporations business by setting broad policies and goals |
| preferred stock | represnts nonvoting ownership of the corporation |
| proxy | ballot that gives a stockholder reprentatives that right to vote |
| bond | is a written promise to repay the amount borrowed at a later date |
| principal | amount borrowed |
| interest | the price paid for the use of another's money |
| organizational chart | is used to show how the different parts of a corporation are related |
| merger | a cobination of two or more businesses to form a single form |
| horzontal merger | which takes place when two or more firms that produce the same kind of productjoin forces |
| vertical merger | which takes place when firms invovlled in different steps of manufacturing or marketing come togther |
| conglomerate | is a firm that has at least 4 businesses, each making unrelated products, none in which is responable for a majority of its sales |
| multinational | ia a corporation that has manufacture or service operations in a number of different countries |
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