Economics Unit 3 test: Business Structures, Costs, and the Stock Market

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dividend
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Check representing a portion of corporate earnings
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depreciation
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non-cash charge a firm takes for the general wear and tear of its capital goods
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charter
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government document that gives permission to create a corporation
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principal
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an amount borrowed
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merger
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a combination of two or more businesses to forma single firm
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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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unlimited liability
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when an owner is fully responsible for all losses and debts of a business
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chamber of commerce
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group that promotes the welfare of its business members and the community
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vertical merger
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the combination of an automobile manufacturer and a tire company, for example
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collective bargaining
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negotiations between labor and management over such issues as pay and work hours
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credit union
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financial organization that accepts deposits from, and makes loans to, employees of a company
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cash flow
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sum of net income and non-cash charges, such as depreciation
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labor union
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organization of workers formed to represent its members’ interest in various employment matters
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conglomerate
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firm of at least four businesses that make unrelated products, none of which is responsible for a majority of its sales
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public utility
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a company- owned either by investors or municipality- that offers an important product to the public, such as electric service
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industry
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the supply side of the market
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laissez-faire
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philosophy that government should not interfere with commerce or trade
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oligopoly
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market structure in which a few large sellers dominate the industry
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collusion
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formal agreement between firms to set prices or to behave in a cooperative manner
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market failure
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a market structures that lacks one or more of the conditions of perfect competition
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monopoly
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a market structure with only one seller of a particular product
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perfect competition
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a theoretical ideal in which a large number of well-informed independent buyers and sellers exchange identical products
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technological monopoly
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a monopoly based on ownership or control of a manufacturing method or process
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market structure
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the nature and degree of competition among firms operating in the same industry
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economies of scale
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when the average cost of production falls as the firm gets larger, thereby justifying the firm to be as large as possible to reduce production cots
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trust
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combinations of corporations or companies that were restricted in the late 1800s
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externality
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unintended side effect that either benefits or harms a third party not involved in the activity that caused it
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price-fixing
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a form of collusion in which firms agree to charge the same or similar prices for a product
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imperfect competition
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usually involves inadequate competition, lack of information, resource immobility, external economies, or public goods.
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financial system
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a network of savers, investors, and financial institutions that work together to transfer savins to investors
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tax exempt
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feature where the federal government does not tax interest pair to investors
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municipal bond
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issued by state or local government to raise funds. (government sells shares of stocks to investors with an interest rate so investors make profit)
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pension
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a regular payment intended to provide income security to a retiree
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financial asset
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claims on the property and borrower’s income (ex: stocks, bonds, bank deposits)
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mutual fund
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company that sells stock in itself and then invests the money in stocks or bonds issued by other corporations
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bear market
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when prices of equities move sharply down for several months or years in a row
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premium
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price paid by the insured for a policy
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current yield
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the annual interest of a bond divided by its purchasee price
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bull market
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when prices of equities move up for several months or years in a row
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futures market
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market place in which futures are bought and sold (Future —–)
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Portfolio diversification
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the practice of holding a large number of stocks so that increases in some can offset declines in others
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Stockbroker
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a person whose profession is to buy and sell equities for others
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equities
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another name for stocks that represent ownership shares in a corporation
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options
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contracts that provide the right to purchase or sell commodities and assets in the future at prices agreed on today (ex: starbucks employee example. Call options- give option to buy stock at certain price, put option- give option to sell at a certain price)
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Secondary market
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market where financial assets can be resold to new owners
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Go Over the Guided Reading Outline in Packet
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Go over Graphing and knowing when to shift Supply and Demand Graph
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