Chapter 3
Terms
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- Profit
- A return on entrepreneurial activity and risk taking. Alternatively, what's left over from total revenues after all the appropriate costs have been subtracted. Also: total revenue minus total cost.
- Feudalism
- Economic system in which traditions rule.
- Private Property Rights
- Comtrol a preivate individual or firm has over an asset.
- Households
- Groups of individuals living together and making joint decisions.
- Stock
- Financial asset that conveys ownership rights in a corporation. Also, certificates of ownership in a company.
- Partnership
- Business with two or more owners.
- Sole Proprietorship
- Business that has only one owner.
- Corporation
- Business that is treated as a person, legaly owned by its stockholders. Its stockholders are not liable for the actions of the corporate "person."
- Market Economy
- An economic system based on private property and the market in which, in principle, individuals decide how, what, and for whom to produce.
- Socialism
- An ecomomic system based on individuals' goodwill toward others, not on their own self-interest, and in which, in principle, society decides what, how, and for whom to produce.
- E-commerce
- Buying and selling over the Internet.
- Soviet-Style Socialist Economy
- Ecomomic system that uses administrative control or central planning to solve the coordination problems: what, how, and for whom.
- Capitalism
- An economic system based on the market in which the ownership of the means of production resides with a small group of individuals called capitalists.
- Mercantilitsm
- Ecomomic system in which government determines the what, how, and for whom decisions by doling out the rights to undertake certain ecomomic activities.
- Consumer Sovereignty
- Principle that the consumer's wishes determine what's produced.
- Enterpreneurship
- The ability to organize and get something done. Also: labor services that involve high degrees of organizational skills, concern, oversight responsibility, and creativity.
- Limited Liability
- The liability of a stockholder(owner) in a corporation; it is limited to the amount the stockholder has invested in the company.
- Industrial Revolution
- A time when technology and machines rapidly modernized industrial production and mass produced goods replaced handmade goods.
- Business
- Private producing unit in our society.
- World Trade Organization (WTO)
- Generally the same as GATT's were--to promote free and fair trade among countries. Also: Organization committed to getting countries to agree not to impose new tariffs or other trade restrictions except under certain limited conditions.
- Global Corporations
- Corporations with Substantial orperations on both the production and sales sides in more than one country.