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ECON 202
Lecture 8 Vocab
| Term | Definition |
|---|---|
| costs required to conduct and complete exchanges; the costs of arranging exchanges between demanders and suppliers | transaction costs |
| costs to allocate and transport goods to the next stage of production an dconsumers | distribution costs |
| costs incurred while waiting to locate or acquire goods; buffers, queues, and inventories | search costs |
| reserves of goods or funds that protect an individual or firm from losses | buffer |
| a line of poeple waiting inturn | queue |
| a stock of goods waiting for further conversion or final sale | inventory |
| osts of acquring information needed to make decisios | information costs |
| costs of arranging contracts and agrements | bargaining costs |
| costs from te acquisition of private or restricted information by third parties | confidentiality costs |
| costs of designing the structuring the alignment of incentives | governance costs |
| transaction costs may cause failure to cooperate and exchange even when the price of a good on its own would be agreeabe | cooperation costs |
| costs of enforcing agreements | enforcement costs |
| anything that incites or stimulates an action | incentives |
| someone who specializes in lowering transaction costs between demanders and suppliers | middleman |
| a system or organization that facilitates transactions between others | institutions |
| an associatio of individuals who organize to produce and sell goods at a profit | firm |
| to maximize its owners' profits | goal of the firm |
| an unorganized (not disorganized) firm | proprietorship |
| a firm owned solely by an indiviudal | sole proprietorship |
| a firm of two or more individuals; may be informl (no partnership agreement) or formal | partnership |
| a legal entity created by a governing authority an dconsisting of one or more persons organized as a firm to engage in any legal activity | corporation |
| an agreement to pay fees and royalties to a different firm to use their property and/or market their goods | franchise |
| a firm jointly owned by an association fo individuals organized voluntarily and managed democratically to accomplish any legal purpose; usually organized to provide beenfits to its members | cooperative |
| a firm that has no residual claimants; profits must be retained to further theh mission of the organization an dmay be distributed as profits | not-for-profit firm |
| as firms mature, owners often become less involved or not involved in the day-to-day management of the firm | separation of ownership and control |
| any attempt by owners to align inventives of managers or control their behavior | corporate governance |
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nomad95
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