Economics Unit 3 Guided Readings

Franchisee

A person who buys a franchise

What is the difference between mediation and arbitration?

Mediation recommends a compromise, arbitration is when both sides must agree to the arbitrator's decision

What is the market theory of wage determination?

an explanation stating that the supply and demand for a worker's skills and services determine the wage or salary

The Better Business ________ provides general information on companies and maintains records of consumer inquires and ________ .

bureau, complaints

The potential for ________ between partners is a disadvantage of partnerships, as is its limited ________—the partnership must be dissolved and reorganized if any partners leave or die.

conflict, partnership

The final third of the wage gap is attributed to ________ ; women and minorities often encounter what is called a ________ ________ that obstruct their advancement up the corporate ladder.

discrimination, glass ceiling

Supporters of the minimum wage argue that it supports the economic goals of ________ and ________ ; opponents object to it based on economic ________ .

equity, security, freedom

One-third of the wage gap is due to differences in the skills and ________ that women bring to the labor market; this is partly because women tend to drop out of the labor force to ________ ________ more often than men.

experience, raise families

Most producer co-op members are ________ who provide their products directly to ________ .

farmers, consumers

Some states have minimum wages higher than the ________ minimum wage; cities like Los Angeles have instituted a "________ ________."

federal, living wage

In a ________ partnership, all partners are responsible for the business's finances and ________ .

general, obligations

In an effort to bring union wages down; employers ask for ________ when negotiating contract. Some companies also used ________ to get rid of labor contracts.

givebacks, bankruptcy

Who takes over business operations in the case of a seizure?

governments

A sole proprietorship is not ________ , so it is ready for business as soon as operations are set up, and the owner keeps all the ________ .

hard, profit

Which two parties take part in collective bargaining?

labor and management

By the end of World War II, public opinion shifted against unions and led to the passage of the ________-________ Relations Act or Taft-Hartley Act of 1947. This act allows individual states to pass ________-to-________ laws.

labor management, right, work

As its own entity, a corporation has an unlimited ________ , and ownership can easily be ________ .

life, shared

Because of ________ ________ ________ , the sole proprietorship may have trouble hiring the employees it needs and carrying enough ________ to satisfy customers or to keep production flowing smoothly.

limited financial capital, stock

In a ________ partnership, each partner is liable for only the amount of his or her original ________ in the business.

limited, investment

In a ________ ________ shop, workers do not have to belong to a union to be hired and cannot be made to join one to keep their jobs. An ________ shop does not require a worker to join a union as a condition to get or keep a job but does require the worker to pay union dues to help pay for collective bargaining costs.

modified union, agency

A ________ company has operations in many different ________ around the world.

multinational, countries

Online social ________ provide a platform for ________ , which allows interested individuals to invest in a promising enterprise.

networking, crowdfunding

A ________ may be formed with a handshake, formal ________ papers are usually drawn up to make the business arrangement official.

partnership, legal

Economists use ________ or ________ dollars, which are adjusted for inflation, to better understand of the ________ power of minimum wages.

real, constant, purchasing

Businesses may take the positive cash flow and ________ by expanding its product line, increasing ________ , or upgrading its machinery or technology.

reinvest, production

Multinational corporations can efficiently move ________ , transfer technologies, and create ________ in many nations.

resources, jobs

The true owners of a corporation are its ________ , who may also be paid a ________ from the profits of the corporation.

stockholders, dividend

Advantages of a corporation are that it can raise capital by selling ________ and its owners and managers have little ________ for its actions or debts.

stocks, revenue

Unions use methods such as ________ , ________ , and ________ to help workers negotiate for higher pay, job security, and better hours and working conditions. Employers sometimes respond with a ________ or by creating their own ________ ________ .

strikes, picket, boycott, lockout, company unions

A sole proprietor does not have to pay separate business income ________ and can ________ close down the business.

taxes, easily

There is a substantial cost if a franchisee wants to ________ the franchise before the end of the contract, and at the end of the contract, all the franchisee has is the right to ________ .

terminate, renew

A ________-________ ________ system keeps wages high for current workers, but brings new workers in at a ________ wage.

two-tier wage, low

What are the four broad categories of labor described, in order from lowest to highest paying?

unskilled labor, semiskilled labor, skilled labor, professional labor

A cooperative is a ________ association that benefits its ________ .

voluntary, members

How has history shaped today's labor laws?

History has shape today's labor laws by trial and error. They figured out what had and has not worked in the past and have improved.

One company may merge with another to ________ and acquire new ________ line.

create, product

Merged companies enjoy greater economies of ________ as their cost per unit of production ________ .

scale, lowers

Which employment trends have helped average workers and which have hurt them?

Give backs, two-tier wage systems, and minimum wage has helped workers. Discrimination of gender/occupations, and skill has hurt workers

List one example of presidential intervention.

In 1981, President Ronald Reagan fired striking air traffic controllers because they were federal employees who had gone on strike despite having taken an oath not to do so.

The ________-________ Act prevented federal courts from issuing rulings against unions engaged in peaceful strikes, picketing, or boycotts. The ________ ________ ________ Act, or Wagner Act, of 1935 established the right of unions to have collective bargaining. The ________ ________ ________ Act of 1938 set the first minimum wage, established time-and-a-half pay for overtime, and prohibited oppressive ________ labor.

Sherman-Antitrust, national labor relations, fair labor standards, child

The results of the actions of nonprofits are difficult to ________ , but they are important contributors to our _________ system.

analyze, economic

A friend, neighbor, family member, or club may act as an ________ investor to provide ________ money to a promising start-up.

angel, seed

According to signaling theory, what types of qualifications indicate superior knowledge or ability?

certificates, degrees, and diplomas

A ________ shop is an arrangement where the employer agrees to hire only union workers. In a ________ shop, workers do not have to belong to the union to be hired, but must join soon afterward and remain a member as long as they keep their job.

closed, union

What does a fact finder do?

collect facts about a dispute and present nonbinding recommendations

Business associations, such as local chambers of ________ , work to create a favorable environment for member ________ .

commerce, businesses

It is more ________ to start a corporation than other forms of business, and corporations are subject to more ________ than are most other types of business.

complicated, taxes

A company is called a ________ when it has merged with at least four other companies making ________ products.

conglomerate, unrelated

A ________ cooperative buys food or other goods in bulk so that members pay ________ prices for the products.

consumer, lower

Many government agencies produce and distribute goods and services to ________ , giving the government a ________ role in the economy.

consumers, direct

A business must get a legal ________ before it can be formed into a corporation that may issue ________ and bonds.

contract, loans

A ________ often pays thousands of dollars to run the business sold by the ________.

corporation, owner

In the industrial post-Civil War period, two main types of unions developed: ________ unions and ________ unions.

craft, industrial

A ________ union is a type of service ________ that provides financial services to its members.

credit, co-op

If the growth of the minimum wage is presented in ________ dollars, which are not adjusted for ________ , the wage appears to have increased dramatically.

current, inflation

One reason for the decline in unions is that ________ have made a determined effort to keep unions out of their businesses; some have hired consultants to map out ________ strategies to fight unions, while others have set up ________-________ plans to reward employees.

employers, legal, profit sharing

A ________ merger is when two companies that produce the ________ type of product join together to form a single company.

horizontal, same

A firm's ________ , or cash flow, is its profits after deductions for all expenses, including ________ , or wear and tear on capital goods such as machinery.

income, depreciation

Some states and universities run new business ________ that help ________ entrepreneurs in the skills they need to run a successful business.

incubators, potential

The government has an ________ role when its actions help to make the ________ economy run more smoothly.

indirect, market

Payments and funds generated from ________ government actions often give recipients a ________ ________ that they would not otherwise have.

indirect, purchasing power

What method did Major League baseball players use against owners to start the 1995 season?

injunction

Owning a franchise gives the businessperson brand-name ________ , known quality products, and a regional or nationwide ________ system to improve the chances of success.

items, network

Some workers belong to ________ unions that engage in ________ bargaining with management for better pay and working conditions for their members.

labor, collective

A sole proprietor has unlimited ________ for his or her business, which means that he or she is fully responsible for all of the businesses loses and debts. A sole proprietor may also have trouble raising needed ________ .

liability, profit

In a ________ partnership, at least one ________ is not active in running the business and has limited responsibility and ________ liability.

limited, partner, limited

Partnerships are easy to start and, because each partner brings a different area of expertise, generally easy to ________ ; they have an easier time attracting ________ than does a sole proprietorship.

manage, capital

What is the process of bringing in a neutral third party to settle a dispute?

mediation

The ________ ________ is the lowest wage that can be paid by law to most workers, and was intended to prevent the ________ of workers.

minimum wage, exploitation

A corporation with a ________ cash flow may give some of that money to its investors in the form of ________ .

positive, dividend

The Tennessee Valley Authority supplies ________ to customers and is in direct ________ with private utility companies.

power, competition

Early unions formed to negotiate terms for their members. The first attempt to organize labor in America was by a group of ________ in the year ________ .

printers, 1778

State and local government provide police, fire fighting, and other ________ services ________ to consumers.

protection, statewide

One downside to a general partnership is that all partners are ________ for the acts of all other partners and have unlimited ________ for the business's debts and losses.

responsible, liability

Examples of indirect government activities in the market include its provision of ________ to college students and ________ Security payments to senior citizens.

scholarships, social

Of all the methods of resolving labor disputes, which ones could lead to higher wages for workers?

signaling theory

Doctors, lawyers, and other professionals may belong to professional ________ that work to ________ policies that benefit their professional membership.

societies, improve

A sole proprietorship is easy to ________ , and it is ________ , because the owner does not have to confer with or answer to anyone else before making a decision.

start, manageable

Its income ________ shows a business's sales, expenses, and ________ income, or the amount it has as profit after expenses have been deducted.

statement, net

Franchisor

the originator of a trade name, product, methods of operation, and the like that grants operating rights to another party to sell its product

How can one union worker with similar skills possibly receive higher wages than another union worker for the same services?

the theory of negotiated wages

Another third of the wage gap is due to ________ distribution of women and men in various occupations; occupations where more men work tend to be ________ ________ than jobs where more women tend to work.

uneven, higher paying

A ________ capitalist invests money in a new and promising, though unproven, start-up company, even though this investment carries a lot of ________ .

venture, losses

A ________ merger is when two companies involved in different steps in ________ and marketing join together.

vertical, manufacturing

Owners of common stock can ________ for a board of directors, but owners of ________ stock cannot.

vote, preferred

New additions to the labor force—especially ________ and teenagers—traditionally have little loyalty to unions; additionally, more Americans are working ________-________ jobs.

women, part time