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WANDZILAK Unit 2/ Standard 5 Vocab (Business Econ)
WANDZILAK Unit 2/ Standard 5 Vocab (Business Econ)
37
Economics
11th Grade
01/31/2012

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Term
entrepreneur
Definition
a risk taker, they combine the three main resource types to create something new or improve upon something else (invent v. innovate)
Term
sole proprietor
Definition
a business organization where the firm is owned by 1 person, unlimited liability
Term
partnership
Definition
a business organization where the firm is owned by 2 or more people, unlimited liability
Term
corporation
Definition
a business organization where the firm is owned by stockholders, has limited liability
Term
limited liability
Definition
the idea that risk is spread around and reduced for owners. Typically used when talking about the benefits of owning a corporation
Term
profit
Definition
the money made after taking into account costs.
Revenue - costs = profit
Term
revenue
Definition
money made on sales of a good or service
Term
fixed cost
Definition
a cost that is constant from month, though the amount might change.
For you= paying for gas or cell phone or lunch
For a business= rent for a place, wages, etc
Term
variable cost
Definition
cost that changes as you produce more or less of a good/service
Term
perfect/pure competition
Definition
a market structure where there is lots of competition, it is easy to start, firms are price takers, identical things are produced
Term
monopolistic competition
Definition
a market structure that is only different from perfect competition because similar things are made
Term
oligopoly
Definition
a market structure where similar things are made, hard to enter, and the firms are sort of price makers
Term
monopoly
Definition
a market structure where there is one business, there is no competition, the firms are price makers
Term
cartel
Definition
a group of businesses that acts together (like a monopoly) to limit prices
Term
business organization
Definition
a way of organizing firms based on risk, reward (liability) and number of owners
Term
market structure
Definition
a way of organizing firms based on competition, price control, and number of firms
Term
cost of production
Definition
the associated costs that go into producing a good or service
Term
competition
Definition
the idea in economics where firms or individuals effort to get the best deal or most business
Term
total cost
Definition
sum total of the cost of all resources that go into making a product, also known as cost of production
Term
anti-trust laws
Definition
laws passed by the government that prevent businesses from combining to create a monopoly
Term
barriers to entry
Definition
factors that limit the ability of people to start a business (money needed, knowledge, machinery, buildings, etc)
Term
collusion
Definition
when a group of businesses work together to behave like a monopoly. They agree to provide a good or service for the same price. Tempting to cheat and is illegal
Term
unlimited liability
Definition
the idea that ALL of the risk is on you as a business owner. Typically applies to sole-proprietors and partnerships
Term
Marginal Cost
Definition
The cost of making one more additional unit of something.
Term
Marginal Revenue
Definition
The money earned by producing one more additional unit of something.
Term
publicly owned company
Definition
When a business allows investors to purchase shares (parts) of the business. Decisions are made by the majority shareholder(s). Original owners no longer have a say
Term
privately owned company
Definition
When a business is owned by the people who started the business. There is no sharing of profits by people outside of the business.
Term
franchise
Definition
when a business owner buys the rights to use the colors and processes of a bigger business.
Term
derived demand
Definition
when something has demand because another good/service has demand. Example: demand for rare metals because electronics are popular. demand for cotton is up because denim jeans are popular.
Term
stock
Definition
buying ownership in a company
Term
franchise
Definition
an independent operator of a business that pays a fee to a corporation that allows them to use color schemes, advertising, production methods. Is typically a version of sole-proprietorship
Term
Entrepreneurship
Definition
One of the four main productive resources. Is when people take on a risk to combine the other resources into a new (invented) or improved (innovated) good or service.
Term
stock symbol
Definition
shorthand version of a company's name. i.e. NIKE= NKE APPLE= APPL WAL-MART= WMT
Term
share
Definition
represents ownership in a company. The more shares you own, the more of the company you own.
Term
deregulation
Definition
when the government takes rules away from a business and lets them compete freely.
Term
stock market
Definition
anywhere stocks are bought and sold. Examples include the New York Stock Exchange and the NASDAQ
Term
stock index
Definition
a measurement of how stock markets are doing. Usually averages together a group of companies ranging in number from 30 to 1000s. Examples include the Dow Jones Industrial Average (DJIA) and the Standard and Poor's 500
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