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Economics 2 mmp
Term | Definition |
---|---|
Non-durable good | last less than three years with regular use |
specialization | people do whatever task they are able to do best |
Division of labor | workers perform fewer task more frequently |
Free enterprise system | one in which consumers and private business make the majority of the economic decisions |
Traditional economy | nearly all economic activity is done based on custom, ritual and habit |
Command economy | government makes nearly all the economic |
Market economy | people and firms act in their own best interest |
Economic questions | what, how, for whom |
capitalism | a system in which private citizens own the factors of production |
Private property | the idea that people have the right to control their possessions as they wish |
Profit | the extent to which a person or business is better off at the end of a period than at the beginning |
Mixed economy | a combination of command and market economies, some government decision making, some private ownership of resources |
Sole proprietorship | a business owned and run by one person |
Partnership | a business that is owned by 2 or more people |
Corporation | a form of business organization that has all the legal rights of an individual |
stock | pieces of ownership of a firm |
Stock holders | people who buy stock |
Dividend | a check paid to the stockholders when the company makes a profit |
Merger | 2 or more businesses join to form a single firm |
Horizontal merger | involves businesses that make the same product or provide the same service |
Vertical merger | firms that do different steps in a production process merge |
Conglomerate | a firm that has at least 4 businesses, each making unrelated products |
Non profit organization | a business that does not seek financial gain for its members |
Labor union | an organization formed to work for its members interest in various employment matters |
Collective bargining | negotiations between labor and management |