Warm Up (b/c its cold outside)

What is economics the study of?

What is scarcity?

What does shortage mean?

What does surplus mean?

What is the difference between producers and

consumers?

Let’s finish Supply & Demand

Take out your Supply, Demand, and Equilibrium Packets

Take the next 15 minutes to complete any problems you still have not finished. Use your neighbors and Mr. Schendt to help you.

We will go over a few on the board as examples at the end.

Business Organizations

Sole Proprietorship

A business owned and managed by a single individual According to the IRS 75% of all

businesses in the US are sole-proprietorships but these generate only about 6% of US sales

Sole ProprietorshipAdvantages

Easy start-up (business licenses, site permit, name of business)

Sole receiver of profit

Full control of business

Easy to discontinue

Not subject to special business taxes

Sole ProprietorshipDisadvantages

Unlimited personal liability Liability is a legally bound obligation to

pay debts Sole proprietors are bound to all of their

business debts

Limited access to resources

Limited life – business lack permanence beyond the life of the sole proprietor

Partnerships

A business organization owned by two or more persons who agree on a specific division of responsibilities and profits

PartnershipsAdvantages

Easy start-up

Shared decision making

Specialization – each partner can bring his or her talents

Larger pool of assets – helpful when the business needs to borrow money

Not subject to special business taxes

PartnershipsDisadvantages

Unlimited liability Each general partner is bound to debt

incurred and responsible for paying this debt

General partners do not have absolute control over their business

Potential for conflict among partners

Corporations

A legal entity owned by individual stockholders

Stockholders own shares of stock Stock = certificated ownership in a

corporation

Stockholders are part owners of the corporation

CorporationsAdvantages

Limited liability for owners

Transferable ownership – owners can sell stock and get money in return

Long Life – business does not end with the death of the owners

More potential for growth

CorporationsDisadvantages

Expensive and difficult to start up

Double taxes Corporations pay taxes on income Stockholders receive dividends (profits paid

out to stockholders) Dividends are also taxed

Potential loss of control by the founders – Board of Directors usually run corporations

More legal requirements and regulations

Fortune 500 Corporations in Charlotte

Name   Revenue Rank 

 Bank of America (Banking) $115.1 billion 13

 Lowe's* (Retail) $50.2 billion 54

 Nucor (Metals) $20.0 billion 138

 Duke Energy (Utilities) $14.5 billion 186

 Family Dollar (Retail) $8.5 billion 301

 Sonic Automotive (Automotive Retailing) $7.9 billion 330

 Domtar* (Forest and Paper Products) $5.6 billion436

 SPX (Electronics) $5.5 billion 446

Charlotte as Corporate Hub

Corporate Combinations

Horizontal Merger – joining of two or more firms competing in the same market with the same good or service

Vertical Merger – joining of two or more firms involved in different stages of producing the same good or service.

Conglomerate – merging of more than three businesses that make unrelated products

Nonprofit Organizations

“Do good” organization, which operates in a businesslike way.

Pros? Help people! Address needs Tax breaks

Cons? Do no make $ Lots of rules

Investment

OVERALL Investment seeks to increase productivity by

increasing inputs. EX: I invest in machinery (input) and I get more cars

(output)

Investment-Spend $$ to make More

What you can invest in and how you can invest your money

Human Capital the people—through pay, benefits, education and

training to increase productivity!

Physical Capital Machinery, Technology, buildings, tools

Venture Capital Investment in a NEW business

Natural resources Land (renewable & nonrenewable resources)

Financial Capital- MAKE MY $$$ GROW!!! Stock Certificate of Deposit (CD)-long term Bond

Investment-Spend $$ to make More