Economics Vocabulary #2

Corporation

• a business owned by stockholders who share in its profits but are not personally responsible for its debts.

• a type of business that is owned and operated by a single individual.

• a partnership where two or more individuals share ownership and profits.

• a non-profit organization that aims to provide services without making a profit.

Traditional Economy

• an economy based on market forces and supply and demand.

• an economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next.

• an economy that relies heavily on technology and innovation.

• an economy where the government makes all economic decisions.

Command Economy

• an economy in which production, investment, prices, and incomes are determined centrally by a government.

• an economy where supply and demand dictate production and pricing.

• an economy that relies on agricultural output and rural labor.

• an economy characterized by minimal government intervention and free markets.

Expenses

• the cost required for something.

• a type of income generated from investments.

• a financial term for savings.

• the amount of money earned from a job.

Proprietorship

• a business owned by one person.

• a partnership between two or more individuals.

• a corporation owned by shareholders.

• a non-profit organization.

Regulations

• rules governing the operation of an economy. Acts as a guide for what the government will and will not allow.

• suggestions for economic improvement by the government.

• guidelines for private sector operations only.

• laws that are optional for businesses to follow.

Profit

• the financial gain made in economics.

• a loss incurred in business transactions.

• the total revenue generated by a company.

• the expenses deducted from total sales.

Loans

• Amounts of money borrowed which will accumulate interest.

• A type of investment that guarantees returns.

• A financial product that provides cash back on purchases.

• A method of saving money for future use.

Partnership

• a business owned by two or more people.

• a type of corporation with limited liability.

• a sole proprietorship with multiple employees.

• a non-profit organization run by volunteers.

Opportunity Cost

• The cost of a missed opportunity

• The benefit of the next best alternative

• Whatever must be given up to obtain some item.

• The total cost of all alternatives