Chapter 4 1. Consumer 2. Consumer Sovereignty 3. Producer 4. Goods 5. Services 6. Consumer goods 7. Essential/ Necessity goods 8. Luxury goods 9.

Economic good 10. Free good 11. Preferences 12. Brand 13. Utility Theory 14. Utility 15. Marginal Utility 16. Total Utility 17. Law of Diminishing Marginal Utility 18. TU- convex utility curve 19. MU- concave 20. Consumer surplus Tangible Goods 1. Consumer goods 2. Essential or necessity goods vs. luxury goods 3. Economic and free good 4. Tastes and preferences Tastes and preferences 1. 2. 3. 4. 5. 6. 7. Age Income Education Gender Occupation Customs and traditions Culture

Maslows Hierarchy of Needs 1. 2. 3. 4. 5. Physiological needs Security needs Social needs Esteem needs Self-actualization needs

Chapter 5 1.) Production 2.) Inputs 3.) Outputs 4.) Labor 5.) Capital resources 6.) Technology 7.) Labor intensive 8.) Capital intensive 9.) Short run 10.) Long run 11.) Fixed input 12.) Variable input 13.) Planning horizon 14.) Production function 15.) Total product 16.) Average product 17.) Marginal product 18.) The law of diminishing returns 19.) Returns to scale 20.) Constant returns to scale 21.) Increasing returns to scale 22.) (economies of scale) 23.) Decreasing returns to scale 24.) Cost 25.) Total opportunity cost 26.) Explicit cost 27.) Implicit cost 28.) Fixed cost (sunk costs) 29.) Variable cost 30.) Total fixed cost 31.) Total variable cost 32.) Total cost 33.) Average cost 34.) Average fixed cost 35.) Average variable cost 36.) Average total cost

Strength of preferences 1. Income 2. Demand of products 3. Brand

37.) 38.) 39.) 40.)

Marginal cost Profit maximization Profit Economic profit

Advantages 1.) Easy to organize 2.) Its organization and operation involves few business requirements 3.) The single proprietor is the boss 4.) Financial operations are not complicated 5.) The owner acquires all profits Disadvantages 1.) 2.) 3.) 4.) Limited ability to raise capital The sole proprietor has limited liability Limited liability to expand Business is entirely a responsibility of the owner

3 broad categories of inputs 1.) Land 2.) Labor 3.) Capital 2 broad categories of technology 1.) Labor intensive 2.) Capital intensive 3 cases of returns to scale 1.) Constant returns to scale 2.) Increasing returns to scale 3.) Decreasing returns to scale Economic profit can be viewed in terms of: 1.) The return accruing to entrepreneurs after payment of all explicit costs and all implicit costs 2.) A residual return to the owner(s) of a firm for providing capital and for risk-bearing 3.) The reward of entrepreneurs for organizing productive activity, for innovating new products, etc., and for risk-taking 4.) The prime mover of a private enterprise economy serving to allocate resources between competing end users in line with consumer demands Chapter 6 Forms of Business Enterprises Single or Sole proprietorship Organizing DTI Pay municipal taxes to local government Apply Vat or non-VAT number Register books to BIR

Partnership Organizing DTI Articles of Co-partnership -> SEC Tax ID # from BIR Municipal license from local government VAT or non-VAT -> BIR Register books to BIR

Contents of Articles of Co-partnership Name of partnership Name of partners Place of business Effective date of partnership Nature of business Investment of each partner and corresponding capital credit Contract duration Rights, powers, duties of partners Accounting period Manner of dividing profits and losses Liabilities of partners from partnership debts Compensation for services Treatment of partners addl investments and withdrawals

Procedures for settlement of the partners interest upon dissolution Provision for settlement of disputes

VAT or non-VAT BIR Register books to BIR

Contents of the Articles of Incorporation By-Laws Rights of Stockholders 1. Vote in person or proxy 2. Receive dividends when declared 3. Inspect corporate books and financial records 4. Pre-emption in issue of shares 5. Elect and remove directors 6. Approve certain corporate acts Advantages 1. Has legal capacity 2. Has continued and more or less permanent existence 3. Management is centralized 4. Most efficient management 5. Shareholders have limited liability 6. Shareholders freedom 7. Ability to raise more capital Disadvantages 1. Complicated to maintain and not easy to organize 2. Government intervention 3. Subject to higher tax 4. Has limited powers 5. Abuses of corporation officials 6. Some, engaged in questionable activities 7. There is a very impersonal or formal relationship between the officers and employees of a cororation Classification 1. Based on nature of its capital Stock corporation Non-stock corporation

Types of Partners 1. Based on their contribution Capitalist partner Industrial partner Capitalist-industrial 2. Based on their liability for partnership debts General partner Limited partner Advantages 1. 2. 3. 4. Easy to form Flexibility of operations Efficiency in operations Partners are expected to have great interest in the operation of the partnership 5. Possibility of bigger resources Disadvantages 1. Partners have unlimited liability for partnership debts 2. Has limited life 3. Limited ability to raise capital 4. Conflicts and quarrels between/among partners Corporation Organizing Verify corporate name SEC Drafting and execution Articles of Incorporation Deposit of cash received from shares of stocks in a banking institution Filing the Articles of Incorporation Payment of filing and publication fees Issue certificate of incorporation by SEC Register corporate name DTI Municipal license from local government

2. Based on purpose Public corporation Private corporation 3. Based on relationship to another corporation Parent corporation Subsidiary corporation 4. Based on situs of incorporation Domestic corporation Foreign corporation 5. Based on whether they want to open in public or not Close corporation Open corporation Voting in corporation Categories of Shares of Stocks 1. 2. 3. 4. 5. 6. 7. Common stock Preferred stock Class A shares Class B shares Par Value shares No par value shares Founders shares

Objectives of a cooperative

Similarities between cooperative and corporation

Differences between a cooperative and a corporation

Chapter 7 1.) Market structure i. Perfect competition ii. Monopoly iii. Monopolistic competition iv. Oligopoly Perfect Competition 1. Large number of small firms 2. Homogeneous product 3. Very easy entry and exit from the market Monopoly

Dividends Kinds of Dividends 1. 2. 3. 4. 5. 6. Cash Property Stock Scrip Bond Liquidating 1. A single seller or producer 2. Unique product 3. Impossible entry into the market Monopolistic Competition 1. Many small firms 2. Differentiated products 3. Easy market entry and exit Oligopoly 1. Few sellers 2. Either homogeneous or differentiated products 3. Difficult market entry Special Types of Market Structure Bilateral Monopoly, Bilateral Oligopoly, Duopsony, Duopoly, Monopsony

Cooperatives Principles of cooperatives 1. 2. 3. 4. 5. 6. Open and voluntary membership Democratic control Limited interest on capital Division of net surplus Cooperative education Cooperation among cooperatives