| A | B |
|---|
| single proprietorship | form of business with responsibility on a single owner, not hard to organize, unlimited liability, more than any other business |
| partnership | 2 or more owners sharing costs, limited life, unlimited liability |
| corporation | business organization with limited liability, unlimited life, make more money, governed by stockholders' votes |
| unlimited liability | owners'personal property can be taken over by creditors in when sued or bankrupt |
| limited liability | individual owners cannot lose more than they have invested |
| limited life | the business ceases upon the death of an owner; partnerships and proprietorships |
| unlimited life | the firm continues to operate even if an owner dies; as in corporation |
| dividend | money received regularly from stocks |
| capital gains | when the stock can be sold for more money than it cost to buy |
| fixed costs | expenses paid no matter how many products the firm manufactures, reduced by selling more product, (mortgage payments, rent, taxes, interest, lease payments |
| variable costs | expenses that change with the number of products produced; wages, raw materials, etc. |
| average fixed cost | total of the fixed costs of operating a business; sell more items, stay open longer, etc. to lower |
| rent | payment for the use of a resource that belongs to someone else |
| interest | payment for the current use of someone else's money |
| profits | money left over after all costs are paid, incentive for operating a business |
| bond | a security representing a debt or loan owned by a borrower to a lender, which pays a fixed rate of interest |
| corporate bond | business must pay back this money owed to the buyer of the bond |
| stock | shares, ownership in a corporation, capital gains and dividents create profit |
| borrowing | loan to buy more resources |
