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23 Cards in this Set

  • Front
  • Back
What does the demand line represent?
the amount of consumers that desire a product
What does the supply line represent?
the amount of product the producers are willing to sell
What is the market value?
the price most people are willing to pay for an item
How do you find the market value?
the intersection of the supply and demand lines
What is the law of supply and demand?
The higher the price, the molre the producers are willing to supply. The lower the price the more the consumers are willing to buy.
What is a household?
anyone who has land, labor, capital, or entrepreneurship to sell in resource markets
What is a product market?
a market where finished goods and services are bought or sold
What is a resource market?
a market where the factors of production or economic resources are bought and sold
What is capital?
What are public goods and services?
goods and services provided by the government because individuals could not supply them efficiently
What are some examples of public goods and services?
public park
post office
police department
How does the government pay for public goods and services?
taxes and borrowed funds
What is the role of financial institutions in public goods and services?
receive deposits
encourage saving and investment by interest
make loans
What is a proprietorship?
A type of business that is owned and managed by one individual who receives all profits and bares all losses
What is a partnership?
A type of business owned and managed by two or more individuals who share all profits and losses
What is a corporation?
A type of business that is owned by stockholders and has rights and responsibilities as if it were a person
What are the advantages of a proprietorship?
easy to start aand go out of business
What are the benefits of a proprietorship?
-easy to start and go out of business
-control over profits and business operations
-pride of ownership
-lower taxes
What are the disadvantages of a proprietorship?
-unlimited liability
-difficult to raise capital
-responsible for all losses
-management knowledge limited
What are the benefits of a partnership?
-easier to raise capital
-can combine management skills
-pride of ownership
-lower taxes
What are the disadvantages of a partnership?
-unlimited liability
-shared profit
-possible conflict of partners
-possibility of instability after death of a partner
What are the benefits of a corporation?
-limited liability
-greater financial capital
-unlimited life
-specialized management
What are the disadvantages of a corporation
-increased taxation
-difficult to start a corporation because of different state laws
-may be larger of bureaucratic than other businesses
-increased government control