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Economics chapter 8 vocabulary

Terms in this set (34)

Business organization
an establishment formed to carry on commercial enterprise
Sole proprietorship
a business owned and managed by a single individual
Business license
authorization to start a business issued by the local government
Zoning law
law in a city or town that designates separate areas of residency and for business
Liability
the legally bounded obligation to pay debts
Fringe benefits
payment other than wages or salaries
Partnership
a business organization owned by two or more persons who agree on a specific division of responsibilities and profits
General partnership
partnership in which partners share equally in both responsibility and liability
Limited partnership
partnership in which only one partner is required to be a general partner
Limited liability partnership (LLP)
partnership in which all partners are limited partners
Articles of partnership
a partnership agreement
Uniform Partnership Act (UPA)
act ordering common ownership interests, profit and loss sharing, and shared management responsibilities in a partnership
Assets
money and other valuables belonging to an individual or business
Corporation
a legal entity owned by individual stockholders
Stock
a certificate of ownership in a corporation
Closed held corporation
corporation that issues stock to only a few people, often family members
Publicly held corporation
corporation that sells stock on the open market
Bond
a formal contract to repay borrowed money with interest at fixed intervals
Certificate of incorporation
license to form a corporation issued by state government
Dividend
the portion of corporate profits paid out of stockholders
Horizontal merger
the combination of two or more firms competing in the same market with the same good or service
Vertical merger
the combination of two or more firms involved in different stages of producing the same good or service
Conglomerate
business combination merging more than three businesses that make unrelated products
Multinational Corporation (MNC)
large corporation that produces and sells its goods and services throughout the world.
Business franchise
a semi-independent business that pays fees to buy parent company in return for the exclusive right to sell a certain product or service in a given area
Royalty
share of earnings given as payment
Cooperative
a business organization owned and operated by a group of individuals for their mutual benefit
Consumer cooperative
retail outlet owned and operated by consumers
Service cooperative
cooperative that provides a service, rather than a good
Producer cooperative
agricultural marketing cooperative that helps members sell products
Nonprofit organization
institution that functions much like a business, but does not operate for the purpose of generating profits
Professional Organization
nonprofit organization that works to improve the image, working conditions, and skill levels of people in particular occupations
Business Association
nonprofit organization that promotes collective business interests in a city, state, or other geographical area, or for a group of similar businesses
Trade association
nonprofit organization that promotes the interests of a particular industry
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