Business Structures
Business structure with 1 person as owner
Sole proprietorship
What is scarcity?
Limited resources vs. unlimited demand
What is inflation?
Increase in prices over time
Benefit of a sole proprietorship
Easy to start and full control
What is opportunity cost?
Value of the next best alternative
What are positive impacts of inflation?
What is bad about a sole proprietorship?
High personal risk and it is hard to raise funds
What is equilibrium?
point where supply and demand intersect - determines market price and quantity of product produced
What is the Producer Price Index?
Measures wholesale prices
How much revenue do corporations generate in America?
90% of business revenue
What are the four systems of economics?
What is price elasticity?
Measures how sensitive the demand for a good or service is to a change in it's price
What are features of an S Corp?
Up to 100 shareholders, pass through taxes, strict regulations
What are traits of a command economy?
Government control, resources are owned by the state, focus on collective goals, government sets prices
Describe the business cycle
Expansion - economy grows, businesses hire more workers, people spend more money
Peak - economy reaches highest point, growth slows, increasing inflation
Contraction - economic activity declines, production slows, businesses cut jobs
Trough - economy hits its lowest point, sets stage for expansion