| A | B |
|---|
| Public goods | Goods & services provided by the government to provide benefits to more than one person at a time |
| Excludagle | a good or service for which payment must be made before use |
| Rival | A good or service which, if consumed, prevents another from consuming it |
| Free rider | One who enjoys the benefits of a good or service without paying for it |
| Tragedy of the Commons | Overuse or misuse of a commonly-owned resource (public grazing land or fishing waters) |
| Contract | legal agreement enforceable by law |
| Property rights, contract enforcement, etc | affect incentives for people to produce and exchange goods&services |
| People less conficent in contracts | no guarantee of enforcement |
| government enforcement of weights & measures | assures consumers that when they buy 10 gallons of gas, they actually get 10 gallons |
| Externalities | Side-effectss in which benefits or costs associated with production affect others |
| Market failure | When market forces supply and demand do not lead to the output society desires |
| Government failure | when cost of solving market failure is greater than the benefit |
| Regressive tax | takes a larger % of income form lower income groups |
| Progressive tax | a tax that takes a larger % of income form higer income groups |
| Cooperative | business owned by people who use its services or work there |
| Corporation | entity owned by stockholders |
| Stockholders liability | limited to the value of the stock they own |
| Franchise | one owner uses the model, methods and trademarks of another |
| Partnership | business with 2 or more owners who share the profits & losses |
| Proprietorship | one owner business with full responsibility for profits and losses |
| Sole Proprietorship benefits | Owner makes all decisions and keeps all profits |
| Sole Proprietorship Costs | limited financial resource / unlimited liability |
| Partnership benefits | Make decisions, keep profits, share responsibilities |
| Partnership Costs | Unlimited liability, potential partner conflicts |
| Corporation benefits | Ability to accumulate sufficient capital for large investments |
| Corporation Costs | Double taxation and more expensive to establish |
| Cooperative benefits | member-owned, members have discounted products ... |
| Cooperative Costs | Decision making more complex and may not satisfy all members |
| Franchise benefits | Training & marketing provided by franchisor |
| Franchise Costs | High fees to franchisor, limited product line, strict guidelines |
| Stock | ownership share or shares of ownership in a corporation |
| Stock market | market in which the public trades stock |
| Bond | certificate of indebtedness issued by a gov't or publicly held corportation to be repaid at fixed interest |
| Shareholder | one who owns stock in a corporation |
| Dividend | a share of net profits paid to stockholders |
| IPO | company's first sale of stock to the public |
| Primary market | where new securities are offered for sale for the first time |
| Secondary market | market in which stocks are bought and sold at public sale (NYSE) |
| Demand | qty of goods or services that buyers are willing and able to buy at all possible prices during a period of time |
| Expectations | What consumers or businesses anticipate will happen |
| Supply | amt of a good or service that producers are willing and able to offer for sale at each possible price during a given period of time |
| Barriers to entry | Factors that restrict entry into an industry & give cost advantages to existing firms |
| Competition | Attempts by 2 or more individuals or organizations to acquire the same goods ..... |
| Differentiation | Making a non-price distinction between the features or characteristics of one's product or service ... |
| Industry | distinct group of productive or profit-making enterprises sharing similar products or services |
| Monopolistic competition | slightly different products sold by large number of relatively small producers including barriers to entry |
| Monopoly | Single supplier of a good or service |
| Natural monopoly | adv of large-scale production making it possible for a single firm to produce the entire output of market at a lower avg cost |
| Oligopoly | few relatively large firmst account for all or most of the production or sales |
| Perfect competition | lge number of small firms product and sell identical products with no significant barriers to entry |
