MCE Chapter 1 Badaway

Franchise

The right to use a specific business's name and sell its products or services in a given territory

Monopolistic Competition

large number of sellers produce very similar products that buyers nevertheless perceive as different

perfect competition

many sellers but none is large enough to dictate the price of a product

Vertical Merger

the joining of two companies involved in different stages of related business

Horizontal Merger

the joining of two firms in the same industry

Equilibrium point

the point at which quantity supplied equals quantity demanded

Demand

the quantity of a good or service that consumers are willing and able to buy

Supply

the quantity of products that manufacturers or owners are willing to sell at different prices at a specific time

Economics

the study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals

Recession

two or more consecutive quarters of decline in the GDP

Recovery

when economy stabilized and starts to grow, eventually leading to economic boom

Globalizaiton

world trade

Laws and Regulations

- Limitations or protections created - Costs of adhering to regulations

Cooperative (Co-op)

A business owned and controlled by the people who use it—producers, consumers, or workers with similar needs who pool their resources for mutual gain Serve one billion members worldwide Members democratically control the business by electing a board of directors that hires professional management Examples: Land O'Lakes, Sunkist Growers, Ocean Spray, Associated Press

Pure RIsk

A chance of loss, but no chance of gain.

Oligopoly

A market structure in which a few large firms dominate a market

C Corporation

A state-chartered legal entity with authority to act and have liability separate from its owners

S Corporation

A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships

Corruption

Achieving ends through unsanctioned means (e.g., bribery, coercion, etc.)

Free Market Capitalism

All or most of the factors of production and distribution are privately owned and operated for profit

Communism

An economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production

Socialism

An economic system based on the premise that some, if not most, basic businesses (e.g., steel mills, coal mines, utilities) should be owned by the government so that profits can be more evenly distributed among the people.

Nonprofit

An organization whose goals do not include making a personal profit for its owners or organizers

Monopoly

Complete control of a product or business by one person or group

Roosevelt's additional freedoms

Freedom of speech and expression Freedom to worship in your own way Freedom from want Freedom from fear

Command Economies

Government largely determines what goods and services gets produced, who gets them, and how the economy grows.

Economic System

How a society chooses to employ resources to produce goods and services, and distribute them for consumption (e.g., capitalism, socialism, etc.)

Resource Development

How to increase resources and to create conditions that will make better use of those resources

Venture Capitalists

Individuals or companies that invest in new businesses in exchange for partial ownership of those businesses.

5 main resources

Land, Labor, Capital, Knowledge, Entreprenuership

Corporation

Legal entity that is separate and distinct from its owners "artificial being" - entity that exists only in the eyes of the law Shareholders have rights to profits (dividends or appreciation of stock) but are not held personally liable for company's debts

LLC

Like S Corp, but without the special eligibility requirements Owner(s) can be a person, partnership, or corporation Owners are not personally liable Pay self-employment tax Pay personal tax or corporate tax LLC ownership is not transferable (no stock)

Free Market Economies

Market largely determines what goods and services gets produced, who gets them, and how the economy grows.

Sole Proprietorship

Owned, and usually managed, by one person Owner manages all areas of the business Usually, fewer benefits and lower wages for employees Most common form of business

rights under free market capitalism

Right to own private property Right to own business and keep all profits Right to freedom of competition Right to freedom of choice

competitive environment

Rivalry for buyer patronage among competing sellers of a product or service

Mixed Economy

Some decisions about allocation of resources are made by the market and some decisions are made by the government.

Small Business Administration (SBA)

US government agency that advises and assists small businesses by providing management, financial advice, and loans

state capitalism

a combination of freer markets and some government control

Partnership

a business owned by two or more people

Speculative Risk

a situation in which either profit or loss is possible

Business

any activity that seeks to provide goods and services to others while operating at a profit

Stakeholders

any constituencies in the organization's environment that are affected by an organization's decisions and actions

franchise agreement

arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell a product or service to others in a given territory

Microeconomics

behavior of people and organizations in particular markets

Economic Boom

business is booming

Franchisor

company that develops a product concepts and sells others the rights to make and sell the products

Crowdfunding

donation based or debt-investment (peer-to-peer lending)

Conglomerate Merger

joining of firms in completely unrelated industries

Aquisition

one company's purchase of the property and obligations of another company

Macroeconomics

operation of a nation's economy as a whole

Consumer Market

people with unsatisfied wants and needs who have both the resources and willingness to buy

Franchisee

person who buys a franchise

Angels

private individuals who invest their own money in potentially hot new companies before they go public

Merger

result of two firms forming one company

Depression

severe recession, usually accompanied by deflation

Demography

statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income.