Economics – Exam 1 spring continued – Flashcards
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what is the most common form of business organization in the U.S.
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sole proprietorship
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what is the main strength of the corporate form of business organization
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ease of raising financial capital
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a government document granting permission to create a corporation is called a
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charter
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basic ownership of a corporation, including voting rights, takes the form of
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common stocks
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all of the following are strengths of the partnership form of business organization EXCEPT
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limited life
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a corporation that has a least four businesses, each making unrelated products, none of which is responsible for a majority of its sales, is called a
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conglomerate
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horizontal mergers involve
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two or more firms that produce the same kind of product
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which of the following statements is true
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a multinational is sometimes a coglomerate
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which are important for their ability to move resources, products, and financial capital across national boundaries with relative ease
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multinationals
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diversification
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a major reason for conglomerate mergers
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merger
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the union of two corporations to form a new corporation
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net income
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the difference between total revenue and total expenses when total revenue is greater
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depreciation
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the loss of the value of capital equipment that results from normal wear and tear
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multinational
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a corporation that has manufacturing or service operations in a number of different countries
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vertical merger
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combination of firms involved in different steps of manufacturing or marketing
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sole proprietorship
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business owned by one person
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limited life
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the firm legally ceases to exist when the owner dies, quits, or sells the business
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corporation
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an organization that is authorized by law to carry on an activity but treated as though it were a single person
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limited partnership
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a type of partnership in which only one partner is required to be a general partner
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bankruptcy
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financial failure caused by an inability to pay one's debts
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production possibilities frontier
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the line on a production possibilities graph that shows the maximum possible output
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gross domestic product
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the dollar amount of all final goods and services produced within a country's borders in a year.
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trade off's
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Where one macroeconomic objective has to be curtailed in favour of another objective
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productivity
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(economics) the ratio of the quantity and quality of units produced to the labor per unit of time
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price stability
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conditions under which the prices for products remain fairly constant.
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economic efficiency
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condition that occurs when all goods and services are produced and consumed at their respective socially optimal levels
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voluntary exchange
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the act of buyers and sellers freely and willingly engaging in market transactions
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mixed economy
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an economic system that combines private and state enterprises
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profit motive
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the force that encourages people and organizations to improve their material well-being
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market
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the world of commercial activity where goods and services are bought and sold
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free enterprise economy
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market economy in which privately owned businesses have the freedom to operate for a profit with limited government intervention
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scarcity
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limited quantities of resources to meet unlimited wants
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opportunity cost
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the cost of the next best use of time and money when choosing to do one thing or another
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capital
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wealth in the form of money or property owned by a person or business and human resources of economic value
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merger
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the combination of two or more commercial companies
