Economics chapter 3
1. New technology 2. New jobs 3. Tax revenue
3 advantages of having a multinationals Corp.
Consumer, producer, service
3 types of cooperatives
1. Worker abuse 2. Export scarce resources 3. Interfere with local business development 4. Influence politica
4 disadvantages of having a multinational Corp.
Multinationals
A corporation that has manufacturing or service operations in a number of different countries
Conglomerates
A firm that has at least four businesses, each making unrelated products, none of which is responsible for a majority of its sales
1. Easy to raise financial capital 2. Unlimited life
Advantage of corporation
Partnership
Business jointly owned by two or more persons
Corporation
Business recognized by law as being its own separate legal entity
Nonprofit organization
Business that place the collective interest of its members over the financial gain of its owners
Merger
Combination of two or more businesses to form a single firm
1. Difficult and expensive to get a charter 2. More government regulation
Disadvantages of corporation
1. Limited life 2. Conflict
Disadvantages of partnership
Regulation
How states, countries, or cities try to attract businesses today
Partnerships
Least common form of business
Preferred
Least risky type of stock
Charter
Legal document that grants permission for a corporation to be formed
Articles of partnership
Legal papers stating how profits and losses will be divided in a partnership
Diversification
Main reason for forming a conglomerate
Horizontal
Merger that involves firms that produce the same kind of product joining forces
Sole proprietorship
Most common form of business organization in the us
General
Most common type of partnership
Divident
Name given to the money that investors receive if the corp. is profitable
Collective bargaining
Name given to the negotiation process that occurs between the union and management
Preferred stock
Non-voting stock
Better business bureau
Organization sponsored by local businesses but is designed to protect the consumer by providing info on companies
Labor unions
Organizations of workers that represent its members interests in employment matters
Stock
Ownership certificates in a firm
Limited
Partnership where one person is not active in the daily running of the business
Chamber of commerce
Promotes the welfare of its members
Chamber of commerce
Promotes the welfare of local businesses and the community at large
Income statement
Report showing a business's sales, expenses, and profits
Professional association
The American medical association is an example of
Unlimited liability
The idea that an owner is personally and financially responsible for all losses that a business incurs
1. Easy to start 2. No special taxes
Two advantages of partnerships
1. Easy to start 2. All profits are yours
Two advantages of sole proprietorship
1. Unlimited liability 2. Limited life
Two disadvantages of sole proprietorship
Horizontal & vertical
Two types of mergers
Limited & general
Two types of partnerships
Common & preferred
Two types of stock available to investors
-reinvesting profit -merger
Two ways a business can grow
-Sell more stocks - issue bonds
Two ways corporations raise financial capital
Sole proprietorship
Type of business owned and run by one person
Cooperatives
Voluntary associations of people formed to carry on some kind of economic activity that will benefit its members
Largest labor union in the us
What is the AFL-CIO
Protects against loss of supplies
What is the most common reason for vertical mergers
Desire for new product lines
Which reason for merging is illustrated by cable companies now offering Internet access and phone service
Catch up with or eliminate competition
Which reason for merging is subject to government regulation
Desire to lose identity
Which reason for merging might occur after extremely negative publicity over a producy