| A | B |
|---|
| General Partnership | An agreement in which both partners share equally in the profit and/or loss of the business. Each partner is liable for all debts incurred by the business. |
| Sole proprietorship | A business owned and operated by one person. |
| Partnership | A business owned and operated by two or more people. |
| Corportation | A business owned by stockholders. |
| Limited Liability Corporation | A combination of a partnership and a corporation. |
| Competition | A rivalry between two or more businesses to gain as much of the total market sales or customer acceptance as possible |
| Non-Price Competiton | Based on factors that are not related to price including competition, the quality of products, customer services, business location, business reputation, and the qualifications of the salespeople. |
| Socialism | With this type of economy, the government tries to reduce the differences between the rich and poor. |
| Communism | Countries that have a government run by one political party which controls everything have this type of economy. |
| Limited partnership | Each limited partner is liable for any debts of the business up to the amount of his/her investment. |
| Mixed Economy | Economies that are not pure market systems, nor completely controlled by the government. |
| Free Enterprise System | Encourages individuals to start and operate their own business with limited government involvement. |
| Price Competition | Focuses on the selling price of a product. Consumers prefer to buy products that are lowest in price. For example, Wal-Mart promotes its company as having great value at every day low prices. |
| Public/Open Corporatioin | Offer shares of stock for sale to the general public. |
| Command Economy | The government answers the three basic economic questions. |
| Profit | The money earned from conducting business after all costs and expenses have been paid. |
| Risk | The potential for loss or failure. For example, when investing in a new business venture, there is no guarantee of success. |
| Traditional economy | The three economic questions are answered by how things have always been done. |
| Market Economy | There is no government involvement in answering the three basic economic questions; the market answers them. |
| Indirect Competition | Two or more companies that employ different types of business formats to sell similar goods. |
| Direct Competition | Two or more companies that utilize the same type of business format. |
| Monopolies | When one company has exclusive control over a product or the means of producing it. For example, there may be only one gas station or grocery store in a small town. |
| Private/Closed Corporation | Do not offer shares of stock for sale to the general public. |
| Pass-through taxation | The earnings of the LLC are taxed only once. |
| Capitalism | The people elect the government officials who represent their interests. |
