Business Formations &
Basic Economic Principles
Basic Economic Principles
What business formation only has one owner that has full control
Sole Proprietorship
what is an entrepreneur
The point where the supply and demand curves intersect, determining the
market price (equilibrium price) and quantity
What 3 questions do Economic Systems answer?
What to produce? How to produce? For whom to produce?
What is a partnership
2+ owners that split profit and loss
what are some traits of entrepreneurs
passion, risk taking, communication
What are the main ideologies that shape these economic systems?
Capitalism, Socialism, Communism
what business formation is limited
Limited liability company
what does an entrepreneur do
identifies a market need, develops an innovative idea
what is a general increase in prices over time, reducing the purchasing power of money.
Inflation
what is a fundamental economic principle that explains how prices are determined in a market economy.
Supply and demand
who is the target audience for a grocery store
everyone
what economic system is based on customs; e.g., indigenous tribes.
Traditional Economy
What is the point where the supply and demand curves intersect, determining the market price and quantity.
Equilibrium
how many small businesses fail in the first year
80%
what economic system is based on Supply/demand driven; e.g., Hong Kong.
Market Economy