Fall 2017 Unit 1

Question Answer
Charities whose aims are to raise money to aid society Non-Profit
The person buying the rights to use the franchise name Franchisee
Businesses owned by private individuals with the aim of making a profit Private Sector
An organisation owned by a national government Public Sector
The annual payment made from a franchisee to the franchisor Royalty Fee
A legal entity created under state law that can open a bank account, purchase property, enter into contracts and operate a business. Corporation
A business where two or more people share ownership. Partnership
An unincorporated business with one owner who pays personal income tax on profits from the business. Sole Proprietor
This business buys goods in large quantities, typically from manufacturers, and resells them in smaller batches to retailers. Wholesale Business
This Business buys goods, often from wholesalers, and resells them directly to consumers, who are the end buyers. Retail Business
This business provides services to customers for a fee. Service Business
This business uses components, parts or raw materials to make a finished good. These finished goods can be sold directly to consumers or to other manufacturing businesses that use them for making a different product. Manufacturing Business
Type of Economy where decisions are made by the government Command Economy
Type of Economy where decisions are made by individuals competing freely with one another Market Economy
Type of economy where some decisions are made by the government and some are made by individuals Mixed Economy
The value of the next best alternative. (The value of what you gave up) Opportunity Cost
An arrangement where buyers and sellers of goods/services/resources carry out an exchange Market
The various quantities of a good/service the consumer is willing and able to buy at different possible prices during a particular time Demand
The various quantities of a good/service a firm is willing and able to produce and supply to the market for sale at different possible prices, during a particular time period, Supply
costs of factors of production (factor or resource prices)
technology
prices of related goods: competitive supply
prices of related goods: joint supply
producer (firm) expectations
taxes (indirect taxes or taxes on profits)
Determinants of Supply
income in the case of normal goods
income in the case of inferior goods
preferences and tastes
prices of substitute goods
prices of complementary goods
demographic (population) changes, i.e. changes in the number of buyers
Determinants of Demand
As the price of something goes up, the less buyers want it. Law of Demand
Economic rule stating that price and quantity supplied move in the same direction Law of Supply
The amount added to the cost price of goods to cover overhead and profit. Markup
A deduction from the usual cost of something, typically given for prompt or advance payment or to a special category of buyers. Discount
A sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc. Tax

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