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July 22, 2018 

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UTILITY MEASUREMENT: A quantification of the satisfaction of wants and needs achieved through the consumption of goods and services. In principle, utility measurement can take one of two forms: (1) cardinal, which is based on numerical values (1, 2, 3, etc.) and (2) ordinal which is based on rankings (first, second, third, etc.). While the hypothetical instructional analysis of utility relies on cardinal utility, ordinal utility is a more realistic way to measure satisfaction.

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FINANCIAL MARKET: A market that trades financial assets. Financial assets are the legal claims on the real assets in our economy and include such notable items as corporate stocks and bonds, government securities, and money. Without financial markets our economy would find it almost impossible to accumulate the funds needed for investment in big, expensive capital projects.

     See also | financial asset | legal claims | corporate stock | government security | stock market | money | commodity exchange | futures | option | foreign exchange market | capital | investment | circular flow | factor markets | product markets | interest rate | rate of return | yield |


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LIMITED LIABILITY

A condition in which owners of a business are not personally held responsible for the debts created by the business. Corporations are the most noted types of business organizations in which owners have limited liability. Limited liability makes it possible for a business to accumulate large sums of money and thus to take advantage of large scale production. The alternative to limited liability is unlimited liability, a characteristic of proprietorships and partnerships.

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Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors wanting to buy either decorative picture frames or storage boxes for your income tax returns. Be on the lookout for broken fingernail clippers.
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Only 1% of the U.S. population paid income taxes when the income tax was established in 1914.
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