Warm Up (b/c its cold outside)  What is economics the study of?  What is scarcity?  What does shortage mean?  What does surplus mean?  What is the difference between producers and consumers ?

Let’s finish Supply & Demand  Take out your Supply, Demand, and Equilibrium Packets  Take the next 15 minutes to complete any problems you still have not finished. Use your neighbors and Mr. Schendt to help you.  We will go over a few on the board as examples at the end.

 Business Organizations

Sole Proprietorship  A business owned and managed by a single individual  According to the IRS 75% of all businesses in the US are sole-proprietorships but these generate only about 6% of US sales

Sole Proprietorship Advantages  Easy start-up (business licenses, site permit, name of business)  Sole receiver of profit  Full control of business  Easy to discontinue  Not subject to special business taxes

Sole Proprietorship Disadvantages  Unlimited personal liability  Liability is a legally bound obligation to pay debts  Sole proprietors are bound to all of their business debts  Limited access to resources  Limited life – business lack permanence beyond the life of the sole proprietor

Partnerships  A business organization owned by two or more persons who agree on a specific division of responsibilities and profits

Partnerships Advantages  Easy start-up  Shared decision making  Specialization – each partner can bring his or her talents  Larger pool of assets – helpful when the business needs to borrow money  Not subject to special business taxes

Partnerships Disadvantages  Unlimited liability  Each general partner is bound to debt incurred and responsible for paying this debt  General partners do not have absolute control over their business  Potential for conflict among partners

Corporations  A legal entity owned by individual stockholders  Stockholders own shares of stock  Stock = certificated ownership in a corporation  Stockholders are part owners of the corporation

Corporations Advantages  Limited liability for owners  Transferable ownership – owners can sell stock and get money in return  Long Life – business does not end with the death of the owners  More potential for growth

Corporations Disadvantages  Expensive and difficult to start up  Double taxes  Corporations pay taxes on income  Stockholders receive dividends (profits paid out to stockholders)  Dividends are also taxed  Potential loss of control by the founders – Board of Directors usually run corporations  More legal requirements and regulations

Fortune 500 Corporations in Charlotte  Name RevenueRank  Bank of America (Banking)$115.1 billion13  Lowe's* (Retail)$50.2 billion54  Nucor (Metals)$20.0 billion138  Duke Energy (Utilities)$14.5 billion186  Family Dollar (Retail)$8.5 billion301  Sonic Automotive (Automotive Retailing)$7.9 billion330  Domtar* (Forest and Paper Products)$5.6 billion436  SPX (Electronics)$5.5 billion446

Charlotte as Corporate Hub  Top Cities: (With 6 or more HQ)  Rank - City - HQ  1New York City (42)  2Houston (23)  3Atlanta (10)  4Dallas (9)  5Minneapolis (8)  5San Francisco (8)  5St. Louis (8)  8Charlotte ( 6)  8Chicago (6)  8Cleveland (6)  8Englewood, Colo. (6)  8McLean, Va. (6)  8Pittsburgh (6)

Corporate Combinations  Horizontal Merger – joining of two or more firms competing in the same market with the same good or service  Vertical Merger – joining of two or more firms involved in different stages of producing the same good or service.  Conglomerate – merging of more than three businesses that make unrelated products

Nonprofit Organizations  “ Do good ” organization, which operates in a businesslike way.  Pros?  Help people!  Address needs  Tax breaks  Cons?  Do no make $  Lots of rules

Investment  OVERALL  Investment seeks to increase productivity by increasing inputs.  EX: I invest in machinery (input) and I get more cars (output)

Investment-Spend $$ to make More What you can invest in and how you can invest your money  Human Capital  the people—through pay, benefits, education and training to increase productivity!  Physical Capital  Machinery, Technology, buildings, tools  Venture Capital  Investment in a NEW business

 Natural resources  Land (renewable & nonrenewable resources)  Financial Capital- MAKE MY $$$ GROW!!!  Stock  Certificate of Deposit (CD)-long term  Bond Investment-Spend $$ to make More