Econ 165 Ch. 11

  1. A person living alone or a group of persons occupying a housing unit constitute a _________.
    • household
  2. Over the years, the number of households in the United States has been _________, but the average number of persons per household has been __________.
    • increasing
    • decreasing
  3. Household income before taxes is termed ________ income and comes from the sale of _________ or from __________ payments.
    • personal
    • resources
    • transfer
  4. The main source of income for households is from the sale of ______ resources. Over the years, transfer payments have ________ in importance as a source of income. The largest amount of transfer funda goes to recipients of __________ _________.
    • labor
    • increased

    Social Security
  5. In 2006, average household income was approximately $48,201. Households headed by a college graduate averaged ________ than this amount, and households headed by a highschool graduated averaged _______. This illustrates a _______ relatioship between household income and the level of education of the household head.
    • more
    • less
    • direct
  6. Most household income is used to ______ goods and services, but household income is also used to pay _______ to the government and can be ______ for future use. Most household purchases are for _______, followed by spending for goods with a short useful life time of more than one year, or _______ goods.

    • taxes; saved
    • services
    • nondurable
    • durable
  7. To maximize economic well-being an individual must balance the _____ and _____ of possible atlernative actions and choose the one that adds the ______ amount to total economic satisfaction.
    • benefits; costs
    • greatest
  8. In making spending decisions, an individual tries to find the combination of goods and services that provides the greatest amount of satisfaction, or ______, from a given limited ________.
    • ulility
    • income
  9. To maximize the total utility from consuming goods and serviees, an individual must weigh the added _______ received from each additional unit of an item that can be purchased against the ____ of the item. If a person with $20 to spend would receive twice as much utility from a $14 steak dinner as he would from an $8 pasta dinner, then this person would maximize utility by purchasing the ______ dinner.
    • utility
    • price
    • steak
  10. In making earning decisions, the additional _____ from income gained by working more hours must be balanced against the additional _______ from having to forgo other activities in order to work those extra hours.
    • satisfaction
    • dissatisfaction
  11. There are ______ legal forms of business organization.
  12. A one-owner business is a ________. In this form of business, the owner has _______ liability for the debts of the firm, and may find it difficult to raise large sums of _______ to finance expansion, improvements, and other activities.
    • proprietorship
    • unlimited

  13. An unincorporated busniess owned by two or more persons is a _________. The partner(s) with unlimited liability for the debts of the firm are _______ partners.
    • partnership
    • general
  14. A business that has a "life of its own" and acan continue to operate while owners come and go is a ________. In order to form a corporation, a _________ stating details about the nature and purpose of the firm must be obtained.
    • corporation
    • charter
  15. The owners of a corporation are its __________. If a stock pays a specified dividend to its holder and the holder is paid before holders of other types of stock, it is _________ stock. If there is no specified dividend, it is a _________ stock. Owners of corporation can borrow money on a long-term basis for expansion or other purposes through ___________.

    • preferred
    • common
    • limited

  16. Stockholders ______ a corporation; the board of directors, which is _______ by the stockholders, ________ a corporation; and top management, which is ________ by the board of directors, _________ a corporation.
    • own
    • elected
    • governs
    • appointed; runs
  17. In the United States, most business firms are organized as _________. However, the majority of business receipts go to ________.
    • proprietorships
    • corporations
  18. Many businesses are ________ by other businesses. When one firm obtains control of another firm, a ________ or _________ has occurred.

    merger; acquisition
  19. When a corporation acquires another corporation that produces an unrelated product, it is called a ______ merger. When a firm acquires another firm that competes with it, it is called a ______ merger; and when a firm acquires a firm that is a supplier or distributor, it is called a ______ merger.


  20. A corporation that is organized to own the stock of other corporations is a _______ company.
  21. Through the 1980s and 1990s, the number of mergers in the U.S. was high. Ther price tags on many corporate acquisitions are in the _______ of dollars.
  22. In economics, it is generally assumed that the basic objective of a business firm is to _______ its profit or to ______ its loss.
    • maximize
    • minimize
  23. The money that a firm receives from selling its product is called _____. Profit or loss is equal to ______ minus ______. If revenue is greater than costs, the firm is earning a ________; if revenue is less than costs, the firm is sustaining a _______.
    • revenue; revenue
    • costs
    • profit
    • loss
  24. Profit goes to proprietors, partners, or ________ in corporations.
  25. There is some controversy surrounding the goal of profit mazimizatioon or loss minimization. Two controversial points regard what exactly is meant by profit ________, and whether a firm may seek alternative ______ in the short run.
    • maximizaiton
    • objectives
  26. The management of a corporation may be motivated to maximize profit in order to satisfy the corporation's _________, or its failure to maintain satisfactory profits may lead to a hostile ________.
    • stockholders
    • takeover
  27. Over
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Econ 165 Ch. 11