1. “Business Organizations and Competition”

2. Three Types of Business
Sole Proprietorship – one person or family
Partnership – two or more
Corporation – owned by stockholders

3. Sole Proprietorship
Advantages
Easy to set up
Pride
Profit
Make immediate decisions
No corporate income tax

4. Sole Proprietorship
Disadvantages
Unlimited liability
Startup money
Lose personal assets

5. Partnership
Advantages
Easy to get start up money
No corporate income tax
Use each partner’s special talents

6. Partnership
Disadvantages
Unlimited liability
Legal structure

7. Corporation
Advantages
Ease of raising money
Ownership can be easily transferred
Limited liability

8. Corporation
Disadvantages
Expensive to set up
Stockholders have little say in the business
Government regulations and double taxes

9. Charter
A federal government document that gives someone permission to form a corporation.

10. Conglomerate
When four or more corporations that sell different products merge together.

11. Multinational
A corporation that has locations in different countries.

12. Stockholders
Investors that purchase certificates of ownership towards a corporation.

13. New York Stock Exchange
The oldest, largest, and most prestigious exchange in the U.S.

14. Dow Jones Industrial Average
It measures the stock performance of the NYSE.

15. Reading Stock Market Reports
stock symbol
closing price
highest and lowest for year
# of stocks traded
highest and lowest for day
net change
name of company

16. Types of Labor
Unskilled
Semi-skilled
Skilled
Professional

17. Unskilled Requires no specialized skills, education, or training
Hourly wage
Ex. Dishwasher, messengers, janitors, and many factory and farm workers

18. Semi-skilled
Requires minimal specialized skills and education
Hourly wage
Ex. Lifeguards, short order cooks, and some construction workers

19. Skilled
Requires specialized abilities and training to do tasks such as operating complicated equipment
Usually hourly wages
Ex. Auto mechanics, bank tellers, plumbers, firefighters, chefs, and carpenters.

20. Professional
Demands advanced skills and education.
Salary
Ex. Managers, teachers, doctors, actors, professional athletes, and computer programmers.

21. Five Reasons for Income Inequality
Education
Wealth
Discrimination
Ability
Monopoly Power

22. Frictional – workers who are between jobs.
Five Types of Unemployment
Frictional – workers who are between jobs.
Ex: “just moved into town”

23. Seasonal – changes in weather or changes in demand.

24. Structural – change in the economy reduces demand for workers and their skills.

25. Technological – when workers with less skills, talent, or education are replaced by machines. This is called “automation.”

26. Cyclical – directly related to swings in the business cycle.
Ex: recession, depression

27. Employment, Labor, Wages

28. Unemployment Rate
The number of unemployed individuals divided by the total number of persons in the civilian labor force.

29. Union
Association of skilled workers who perform the same kind of work.

30. Strike
Refuse to work until certain demands are met.

31. Picket
Parade in front of the employer’s business carrying signs about the dispute.

32. Boycott
Mass refusal to buy products from targeted employers or companies.

33. Lockout
Refusal to let the employees work until management demands are met.

34. Collective Bargaining – when union and management agree to get together and negotiate.
Mediation - bringing in a third party to help settle dispute.
Arbitration – union and management agree to let the third party make the decision.

35. Injunction - A court order not to act. It forces them to negotiate.
If it is against the union, they cannot strike. If it is against management, they cannot lockout their employees.

36. Seizure – Government takes over the company to negotiate with workers.