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Economics: Chapters 8 & 9 Study Guide
Terms in this set (39)
Person who organizes, manages, and assumes the risks of business in order to gain profits.
A beginning business enterprise.
Private- or government-funded agency that assists new businesses by providing advice or low-rent buildings and supplies.
Extra supply of the items used in a business, such as raw materials or goods for sale.
Income received from the sale of goods and/or services; also, slips of paper documenting a purchase.
Business owned and operated by one person.
Owner of a business.
Requirement that an owner is personally and fully responsible for all losses and debts of a business.
All items to which a business or household holds legal claim.
Business that two or more individuals own and operate.
Special form of partnership in which one or more partners have limited liability but no voice in management.
Limited liability company
Type of business enterprise that protects members against losing all of their personal wealth; members are taxed as if they are in a partnership.
Partnership set up for a particular purpose for a short period of time.
Type of business organization owned by many people but treated by law as though it were a person; it can own property, pay taxes, make contracts, and so on.
Share of ownership in a corporation that entitles the buyer to a certain part of the future profits and assets of the corporation.
Requirement in which an owner's responsibility for a company's debts is limited to the size of the owner's investment in the firm.
Articles of incorporation
Document listing basic information about a corporation that is filed with the state where the corporation will be headquartered.
License to operate granted to a corporation by the state where it is established.
Shares of ownership in a corporation that give stockholders voting rights and a portion of future profits (after holders of preferred stock are paid).
Portion of a corporation's profits paid to its stockholders.
Shares of ownership in a corporation that give stockholders a portion of future profits (before any profits go to holders of common stock), but no voting rights.
A set of rules describing how stock will be sold and dividends paid.
Contract in which one business (the franchisor) sells to another business (the franchisee) the right to use the franchisor's name and sell its products.
The extent to which competition prevails in particular markets.
Market situation in which there are numerous buyers and sellers, and no single buyer or seller can affect price.
Market situation in which a single supplier makes up an entire industry for a good or service with no close substitutes.
Barriers to entry
Obstacles to competition that prevent others from entering a market.
Economies of scale
Low production costs resulting from the large size of output.
Exclusive right to make, use, or sell an invention for a specified number of years.
Exclusive right to sell, publish, or reproduce creative works for a specified number of years.
Industry dominated by a few suppliers who exercise some control over price.
Manufacturers' use of minor differences in quality and features to try to differentiate between similar goods and services.
Arrangement among groups of industrial businesses to reduce international competition by controlling the price, production, and distribution of goods.
Market situation in which a large number of sellers offer similar but slightly different products and in which each has some control over price.
A board of directors, the majority of whose members also serve as the board of directors of a competing corporation.
Federal and state laws passed to prevent new monopolies from forming and to break up those that already exist.
The legal combination of two or more companies that become one corporation.
Large corporation made up of smaller corporations dealing in unrelated businesses.
Reduction of government regulation and control over business activity.
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