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Definition
| A firm owned by a single individual |
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Definition
| Firms owned jointly by two or more persons |
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| A legal form of business that provides owners with protevtion from losing more than their investment should the business fail |
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| If the firm fails, the owners can never lose more than the amount they have invested in the firm |
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Term
There are more partnerships than corporations
T/F
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Definition
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Term
Corporations make the most revenue and profits
T/F |
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Definition
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Term
| Separation of Ownership from Control (D) |
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Definition
| When the head of a company does not own a large part of the actual company |
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Definition
The way in which a corporation is structured and the effect a corporation's structure has on the firm's behavior
IE) Bloomberg believes in transparency and that dictates how the company is run |
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Term
| Principle Agent Problem (D) |
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Definition
The conflict between the interest of shareholders and the interest of top management
IE) Companies don't like to go private because their shaleholders won't let them take risks |
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Definition
| Taking a loan out from a bank, which the bank is loaning from account holders |
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Definition
A borrower selling the lender a financial security, which is a document that states the termsuder which the funds have passed from the buyer of the security to the seller.
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Definition
| Financial securities that represent promises to repay a fixed amount of funds |
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Term
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Definition
| Interest payments on a bond |
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Definition
| Profits paid to shareholders |
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Term
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Definition
| Buying part ownership of a firm |
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Term
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Definition
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Term
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Definition
| If a firm incurs an opportunity cost but does not spend money |
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Term
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Definition
| A firm's revenue minus its economic costs |
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Term
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Definition
| A firm's summation of its financial position on a particular day, usually the end of a quarter or year |
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Term
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Definition
| The enjoyment or satisfaction people receive from consuming goods and services |
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Term
Most of the important conclusions of the economic model of consumer behavior depend on utility being directly measureable
T/F |
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Definition
False
Utility cannot be measured |
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Term
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Definition
Amount of utility you receive from consuming a singular product
IE) The marginal utility of your first slice of pizza might be twenty but your fifth slice might be 6 |
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Term
| Law of Diminishing Marginal Utility (D) |
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Definition
| For nearly every good or service, the more you consume during a period of time the less you increase your total satisfaction from each addition unit you consume |
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Term
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Definition
| Limited amount of income available to households to spend on goods and services |
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Definition
The value of a product increases as more people use it
IE) An app store
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Definition
An area of economics where consumers don't make choices that are completely rational
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Term
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Definition
| The tendency of people to be unwilling to sell a good they already own even if they are offered a price that is greater than the price they would be willing to pay to buy the good if they didn't already own it. |
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Definition
| A cost that has already been paid and cannot be recovered |
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Definition
Shows combinations of consumption bundles that give the consumer the same utility
[image] |
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Term
| Marginal Rate of Susbtitution (D) |
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Definition
| The rate at which a consumer is willing to trade off one product for another while keeping the consumer's utility constant |
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Term
To maximine utility, a consumer needs to be on the lowest indiference curve, given his budget constraint
T/F |
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Definition
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