Standard of living
– the amount of goods as services people can buy with the money they have.
– All the people who stand to gain or lose by the policies and activities of a
– The surrounding factors that either help or hinder the development of
– giving frontline workers the responsibility, authority, and freedom to respond
quickly to customer requests.
Of the five factors of production, entrepreneurship and knowledge is most
Technology enables workers to be more effective, efficient, and productive.
What has sustained the United States as the world’s economic leader is the
development and use of technology to improve productivity.
– A business that is owned, and usually managed, by one person.
: Ease of starting and ending, being your own boss, pride of ownership, leaving a
legacy, retention of company profit, no special taxes.
: Unlimited liability, limited financial resources, management difficulties,
overwhelming time commitment, new fringe benefits, limited growth and lifespan of business.
– A legal form of business with two or more owners.
ADVANTAGES: More financial resources, shared management and pooled/complementary skills
and knowledge, longer survival, no special taxes.
DISADVANTAGES: Unlimited liability, Division of profits, Disagreements among partners,
Difficulty of termination.
– A legal entity with authority to act and have liability spate from its owners.
ADVANTAGES: Limited liability, More money for investment, Size, Perpetual life, Ease of
ownership change, Ease of drawing talented employees, Separation of ownership from management.
DISADVANTAGES: Extensive paperwork, Double taxation, Two tax returns, Size, Difficulty of
termination, Possible conflict with stockholders and board of directors, initial cost.