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Ch.3 Business
Global Business
| Question | Answer |
|---|---|
| international business | business transactions between domestic and foreign countries |
| absolute advantage | producing a good/service better than other countries |
| comparative advantage | producing a specific product more efficiently than any other product |
| tariffs/import duty | taxing particular foreign product that enters country |
| dumping | charging lower price on large quantities of foreign products as compared to domestic |
| non tariff barrier | nontax measure to encourage domestic suppliers vs. foreign |
| import quota | placing limits |
| embargo | halting trade of a product |
| foreign exchange control | restricting amount of particular foreign currency |
| licensing | contractual agreement where one firm permits another to produce and market its product, whilst using brand name for royalty, etc. |
| Disadvantages of corporations | gov't regulation, paperwork, lack of secrecy, double taxation |
| Advantages of corportations | limited liability, ease of raising capital, ease of transferring ownership, specialized management |
| common stock | voting rights |
| preferred stock | no vote, but first dibs on dividends, liquidation |
| horizontal mergers | Ex: Phama. + Pharma. |
| vertical mergers | Ex: Computers & tech. + automated software |
| conglomerate merger | Ex: financial conglomerate + railroads & transportation |
| S - corporation | taxed as if it were partnership |
| limited- liability | A corporate structure whereby the members of the company cannot be held personally liable for the company's debts or liabilities |
| not for profit | organized to provide a social, educational, religous, etc. purpose |
| Advantages of sole proprietorship | ease of start up and closure, pride of ownership, retention of profits, no special taxes, being your own boss |
| Disadvantages of sole proprietorship | unlimited liability, lack of continuity, limited management skills, difficulty in hiring employees |
| Advantages of partnerships | ease of start up, availability of capital and credit, personal interest, combined business skills and knowledge, retention of profits, no special taxes |
| Disadvantages of partnerships | unlimited liability, management disagreements, lack of continuity, frozen investment |
| cooperative | association of individuals or firms whose purpose is to perform some business function for its members |
| joint venture | agreement b/w 2 groups to form a business entity in order to achieve a specific goal |
| syndicate | temporary association of individuals or firms organized to perform a specific task that requires large amounts of capital |
| franchise | a license to operate an individually owned business and become part of a chain |
| franchising | granting of a franchise |
| franchisor | an individual or organization granting a franchise |
| franchisee | person purchasing a franchise |
| small business industries | distribution, service, production |
| business plan | carefully constructed guide for the person starting the business |
| Advantages of small business | low capital investment, some special skill requirement, high growth and potential |
| Disadvantages of small business | lack of capital and cash flow products, lack of management skills, overexpansion |
| limited partner | invests money in business but holds no responsibilities and/or liabilites |
| master limited | owned and managed like a corporation but taxed as a partnership |
| Hierarchy of corporate structure | stockholders - - > board of directors - -> officers - -> employees |
Created by:
nnaseem98
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