Unit 3

profit-seeking enterprise that produces goods and/or services; includes sole proprietorship, partnerships, corporations

unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm

unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm

form of business organizations recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, sue and be sued

market classification according to number and size of firms, type of product, and type of competition

has all conditions of perfect competition except for identical products

competition involving the advertising of a product's appearance, quality, or design, ratehr than its price

• -market situation in which a few large sellers dominate
• -firms produce and sell either identical or slightly differentiated products
• -high barriers to entry

• -is a market situation w/ only one seller of a particular economic product
• -product has no close substitutes
• -high barriers of entry into market
• -no pure monopoly in US
• -monopolies has total control over price

Market situation where costs are minimized by having a single firm produce the product

Occurs when a town is too small to support two or more of the same business

a firm or individual has discovered a new manufacturing technique or has invented something new

a business the government runs and operates that involve products that private industry cannot supply

network of savers, investors, and financial institutions that work together to transfer savings to investment uses

formal contract to repay borrowed money and interest on the borrowed money at regular future intervals

receipt showing that an investor has made an interest-bearing loan to a financial institution

certificate of ownership in a corporation; common or preferred stock

company that sells stock in itself and use the proceeds to buy stocks and bonds issued by other companies

person who buys or sells securities for investors

person who owns a share or shares of stock in a corporation; sames as stockholders

• -physical exchange located on Wall Street in NYC
• -oldest, largest, most prestigious stock exchange
• -lists the shares of more than 3,000 large companies and has 1,400 broker seats

• -largest american virtual exchange where trading is done through network of computers
• -lists stock prices for about 3,800 companies
• -many of these companies are high-tech

• -published the average closing price for 30 representative stocks
• -look at % change to see how market is doing
• -uses only stocks on NYSE

-st

• -stock performance index that uses prior changes of 500 representative stocks as indicator of market performance
• -measures stocks from more than one stock exchange

-stock performance index that uses price changes of over 3,000 representative stocks from NASDAQ ONLY

When stock prices are rising

When stock prices are falling

transaction is made immediately at the market price

markets in which options are traded

contract giving investors the option to buy commodities, equities, or financial assets at a specific future date using a price agreed upon today

contract giving investors the option to sell commodities, equities, or financial assets at a specific future date using a price agreed upon today