Economic Systems
People may use a barter system and/or grow their own foods
What is a Traditional Economy?
The majority of small business in the US fall under this category
What is a Sole Proprietorship?
This is a factor only when you have to pay for it etc. forests, mines
What are natural resources?
an economic system based on private ownership of the means of production
What is capitalism?
The US passed the ____ to prevent any monopolies from forming.
What is the Sherman Antitrust Act?
The government cannot tell people what to produce or buy
What is a market economy?
Advantage- they are permanent organizations that continue going even after original owners die or sell
What is a corporation?
Any equipment you might needed to produce your goods or services. This includes tools, trucks, machines, and computers
What is capital?
people who buy corporate stocks
Who are stockholders?
This type of stock is more risky however benefits include possibility of higher dividends
What is common stock?
the us is this type of economy
What is a free market economy?
Disadvantage- disagreements can arise, company can lose efficiency
What is a partnership?
They use their own labor/ capital and take all risks however it can be a big payout/ often come up with ideas
What is entrepreneurship?
principle that business owners in free market are allowed to run their business in any way they see fit, with little government interference
What is free enterprise?
This type of business is not taxed by the government
What is a nonprofit organization?
Government controls or owns all capital, tools, & production
What is a command economy?
business organization that provide goods and services without seeking to earn a profit from stockholders
What is a nonprofit organization?
Usually used to refer to the workers as opposed to the owners
What is labor?
corporate profits paid to shareholders
What are dividends?
This type of stock is less risky; stockholders do not usually vote in company’s affairs
What is preferred stock?
This is vital to free enterprise- it drives the company to improve their products and services
What is competition?
Most of the country’s largest companies
What are corporations?
the amount of work that can be done per hour (the more workers you have the higher this is)
What is productivity?
process of obtaining goods/ services to satisfy your wants
What is want- satisfaction chain?
federal agency that helps small businesses compete in the economy
What is Small Business Administration?