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LEGAL TYPES: The three primary types of legal firm organizations are: (1) proprietorship, (2) partnership, and (3) corporation. One primary difference between these three legal types are number of owners -- proprietorship has one, partnership has two or more (but usually a small number), and corporation can have anywhere from one or to millions. A second difference is the liability of the owners -- proprietorship and partnership owners have unlimited liability and corporation owners have limited liability. Three newer firm types include (1) limited partnership, (2) S corporation, and (3) limited liability company. Each of these three are hybrids, with characteristics of proprietorship, partnership, corporation.
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Lesson 12: Business Cycles | Unit 4: Causes
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Page: 18 of 26
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Instability of business investment is one explanation of business cycles.- During the Great Depression, production declined by 40% and investment declined by over 90%. Did this big drop in investment cause the overall drop in production?
- Investment can trigger changes in production through the circular flow. A decrease in investment, causes a decrease in production, which reduces household income, which reduces consumption, which causes further reductions in production, income, and consumption.
- Small changes in investment can cause magnified changes in aggregate production. A $10 billion decrease in investment might cause a $50 billion decrease in GDP.
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AVERAGE FACTOR COST Total factor cost per unit of factor input employed by a firm in the production of output, found by dividing total factor cost by the quantity of factor input. Average factor cost, abbreviated AFC, is generally equal to the factor price. However, using the longer term average factor cost makes it easier to see the connection to related terms, including total factor cost and marginal factor cost.
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Before 1933, the U.S. dime was legal as payment only in transactions of $10 or less.
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"Man is born to live, not to prepare for life. " -- Boris Pasternak, writer
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CAC
Consumer Advisory Council
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