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STANDARD CE.10a
Types of Businesses
Role of Entrepreneurship |
The student will
demonstrate knowledge of the structure and operation of the United States
economy by:
a) describing the types of business organizations and the role of
entrepreneurship. |
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What are the basic types of
profit-seeking business structures?
There are three basic ways that
businesses organize to earn profits.
Basic types of business ownership
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• Proprietorship
A form of business organization with
one owner who takes
all the risks and all the profits. |
• Partnership
A form of business organization with two
or more owners who share the risks and the profits. |
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Corporation A form of business
organization that is authorized by law to act as a legal person
regardless of the number of owners. Owners share the profits.
Owner liability is limited to
investment. |
What is an entrepreneur?
Entrepreneur:
• A person who takes a risk to produce goods
and services in search of profit
• May establish a business according to any of the
three types of organizational structures
Entrepreneurs play an important role in all
three business organizations.
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STANDARD CE.10b
How Consumers, Businesses, and Markets Interact
(Circular Flow) |
The student will
demonstrate knowledge of the structure and operation of the United States
economy by:
b) explaining the circular flow that shows how consumers (households),
businesses (producers), and markets interact. |
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How do resources, goods and
services, and money flow among individuals, businesses, and governments in a
market economy?
Resources, goods and services, and money
flow continuously among households, businesses,
and markets in the United States economy.
Economic flow:
• Individual and business saving and investment
provide financial capital that can be borrowed for business
expansion and increased consumption.
• Individuals (households) own the resources
used in production, sell the resources, and use the income to purchase
products.
• Businesses (producers) buy resources; make
products that are sold to individuals, other businesses, and the government;
and use the profits to buy more resources.
• Governments use tax revenue from individuals
and businesses to provide public goods and services. |
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STANDARD CE.10c
Financial Institutions Encourage Saving and Investing |
The student will
demonstrate knowledge of the structure and operation of the United States
economy by:
c) explaining how financial institutions encourage saving and investing. |
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How do financial institutions
encourage saving and investing?
Private financial institutions act as
intermediaries between savers and borrowers.
Characteristics of private financial
institutions:
• Include banks, savings and loans, credit unions, and securities brokerages
• Receive deposits and make loans
• Encourage saving and investing by paying interest on deposits |
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STANDARD CE.10d
Global Economy and Technological Innovations |
The student will
demonstrate knowledge of the structure and operation of the United States
economy by:
d) examining the relationship of Virginia and the United States to the
global economy, with emphasis on the impact of technological innovations. |
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Why do Virginia and the United
States trade with other nations?
Virginia and the United States pursue international trade
in order to increase wealth.
Global Economy—Worldwide
markets in which the buying and selling of goods and services by all
nations takes place
Reasons that states and nations trade:
• To obtain goods and services they cannot
produce or produce efficiently themselves
• To buy goods and services at a lower cost or
a lower opportunity cost
• To sell goods and services to other countries
• To create jobs
Virginia and the United States specialize in
the production of certain goods and services which promotes
efficiency and
growth.
What is the impact of
technological innovation on world trade?
Impact of technological innovations:
• Innovations in technology (e.g., the Internet) contribute to the
global flow of information, capital, goods, and
services.
• The use of such technology also lowers the cost
of production. |