1. Role of Business in the American Economy
Ch. 14.2

2. Role of Business
Entrepreneur- a person who starts a business Entrepreneurs start businesses because they want to earn a profit. What’s a profit? However, it is a major risk. Why?

3. Basic Factors of Production
If you cannot provide your own Factors of Production you have to get them from other sources.
Labor
Paid for by wages
Land
Paid for by rent
Capital
Paid for by interest

4. Business Ownership
Sole Proprietorship- when a business is owned by an individual
An advantage of sole proprietorship is that the owner gets to keep all of the profits.
Partnership- type of business in which two or more people share ownership

5. Business Ownership
Corporation- a business that is run separately from the people who own it
Corporations sell shares of ownership called stocks
People who buy the stocks are called stockholders
Corporations sell stock in order to raise large amounts of money
Corporations make up approximately 90% of the total sales in the US