Prentice Hall Economics: Principles in Action Ch 8 – Flashcards
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Business organization
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an establishment formed to carry on commercial enterprise
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Sole proprietorship
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A business owned and managed by a single individual
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Business license
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authorization to operate a business issued by a local government
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Zoning law
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Legal restrictions on land use: residential, commercial, industrial.
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Liability
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legally bound obligation to pay debts.
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Fringe benefit
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payment other than wages or salaries
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Partnership
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A business organization owned by two or more persons who agree on a specific division of responsibilities and profits
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General Partnership
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partnership in which partners share equally in both responsibility and liability
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Limited partnership
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partnership in which only one partner is required to be a general partner
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limited liability partnership
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partnership in which all partners are limited partners
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articles of partnership
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a partnership agreement
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Uniform Partnership Act
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act , act ordering common ownership interests, profit and loss sharing, and shared management responsibilities in a partnership
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Assets
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money and other valuables belonging to an individual or business
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corporation
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a legal owned by individual stockholders
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Stock
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A certificate of ownership in a corporation
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Closely held corporation
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corporation that issues stock to only a few people, often family members
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Publicly held corporation
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corporation that sells stock on the open market
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bond
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a formal contract to repay borrowed money with interest at fixed intervals
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certificate of incorporation
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license to form a corporation issued by state government
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dividend
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the portion of corporate profits paid out to stockholders
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Horizontal merger
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The combination of two or more firms competing in the same market with the same good or service
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Vertical merger
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the combination of two or more firms involved in different stages of producing the same good or service
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conglomerate
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Business combination merging more than three businesses that make unrelated products
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multinational corporation
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Large corporation that produces and sells its goods and services throughout the world
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Business franchise
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a semi-independent business that pays fees to a parent company in return for the exclusive right to sell a certain product or service in a given area
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Royalty
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share of earnings given as payment
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cooperative
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a business organization owned and operated by a group of individuals for their mutual benefit
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Consumer cooperative
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retail outlet owned and operated by consumers
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Service cooperative
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cooperative that provides a service, rather than a good
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Producer cooperative
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agricultural marketing cooperative that helps members sell their products
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nonprofit organization
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institution that functions much like a business, but does not operate for the purpose of generating profits
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professional organizations
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nonprofit organization that works to improve the image, working conditions, and skill levels of people in particular occupations
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business association
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nonprofit organization that promotes collective business interests for a city, state, or other geographical area, or for a group of similar businesses
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trade association
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Nonprofit organizations that promote the interests of particular industries
