Economics/Business Terms
	 By: Jan Paul Lubek

Business -
A commercial or industrial enterprise, private or in a group and the folks
who constitute it. A system of exchanging goods and services.

Economics -
A social science concerned chiefly with description and analysis 
of the production, distribution, calibration and consumption of 
goods and services, both micro and macroeconomics.

Micoreconomics -
A study of economics in terms of individual areas of activity 
as a firm, household, or prices.

Macroeconomics -
A study of economics in terms of whole systems especially 
with reference to general levels of output and income 
and to the interrelations among sectors of the economy.

Subsidy - 
Money that is given to local products of a specific product.
Grant paid by government to an enterprise that benefits the public,
e.g. for research. Money given to push them to produce:
1. So it's harder for other countries to bring in their products.
2. To help bring prices down in the local country.
Many poor countries will give sugar subsity because sugar is so important to the
local people and they can not afford to buy it if the sugar is expensive.

Marginal profit - Producing or able to produce a supply of goods which, when
sold at existing price levels, will barely cover cost of production.

Windfall profit - profit that occurs unexpectedly as a consequence of some
event not controlled by those who profit from it.

	What is supply ? 
It is the relation between the price and the quantity that 
people want to sell. For an individual firm that is the 
relation between the price and the quantity the firm wants to sell.
So we ask: at a given price, how much will a (profit- maximizing) 
firm want to sell ? Enough so that the price is equal to marginal cost. 
In other words, the marginal cost curve 
is the supply curve for the individual firm.

Supply & Demand -
In classical economics, factors that are said to determine price, 
by correlating the amount of a given commodity producers hope to 
sell at a certain price (supply) and the amount of that
commodity that consumers are willing to purchase (demand). 
Supply refers to the varying amounts of a good that producers 
will supply at different prices; Demand refers to the quantity 
of a good that is demanded by consumers at any given price. 
According to the law of demand, demand decreases as the price rises. 
In a perfectly competitive economy, the combination of the 
upward-sloping supply curve and the downward-sloping demand 
curve yields a supply and demand schedule that, at the intersection 
of the two curves, reveals the equilibrium price of an item. 
Theories of supply and demand had their roots in the early 
20th cent. theories of Alfred Marshall, which recognized 
the role of consumers in determining prices, rather than 
taking the classical approach of focusing exclusively on the 
cost for the producer as a determinant. Marshall's work brought 
together classical supply theory with more recent developments 
concentrating on the utility of a commodity to the consumer. 
More recent theories, such as indifference-curve analysis and 
revealed preference, offer more flexibility to the supply and 
demand theories created by proponents of marginal utility. 
The theory of elasticity is significant as well: 
it shows how certain commodities will bear a substantial 
rise in price if there is not an equitable substitute available, 
while other easily replaceable commodities 
cannot do so without losing business to competitors.  
	In general supply and demands is where goods 
are traded in a market, prices of goods tend to rise 
when the quantity demanded exceeds the quantity supplied at that price, 
leading to a shortage and conversely that prices tend to fall when 
quantity supplied exceeds the quantity demanded. This causes the 
market to approach an equilibrium point at which quantity supplied 
is equal to the quantity demanded. Price is thus seen as a function 
of supply curves and demand curves.
	The theory of supply and demand is important in the functioning 
of a market economy in that it explains the mechanism by which most resource 
allocation decisions are made.
	The theory of supply and demand is usually developed 
assuming that markets are perfectly competitive. 
This means that there are many small buyers and sellers, 
each of which is unable to influence the price of the good on its own. 

Aggregate Supply -
Total supply of goods & services in the economy from domestic sources,
including imports, available from 
Aggregate Demand - A macroeconomic value equal to the sum of all personal,
consumption, business & gov expenditures in particular time period.

Commerce -
Transactions (sales, purchases) having the objective of supplying
commodities (goods, services).

Interstate Commerce -
Commercial trade, business, movement of goods, money or transportation
from one state to another, regulated by fed government.

Market economy -                                      
An economy that relies chiefly on market forces to allocate goods & resources,
to determine proces. It is often contrasted with 
Command economy -
When most allocations of resources occur as a result of commands issued by a central agency.

Market forces -
The interaction of supply & demand that shapes a market economy.

Analyzing Business Choices - Builds a careful model of 
firms' production costs. It starts by defining cost, revenue and profit in 
an economically useful way. It then defines a production function based 
on the law of diminishing marginal product and uses this function 
to build definitions of and relationships between the concepts 
of marginal product, marginal cost, average variable cost and 
average total cost. The lesson emphasizes the impact of capital levels, 
labor cost and improved technology on the marginal cost curve. 

When a company is a corporation and they are incorporated it means it's still 
corporation. Incorporation explains corporation what it did.
Limited Liability Company - LLC

Limited Liability - The liability of a firm's owners for no more than
the capital they have invested in a firm.

Panglossian economics -
Whatever ownership patterns prevail after the privatisation, competition and 
property right would lead to an efficient structure after a while.

Liquidity - How easy it is to buy & sell a financial instrument for cash without
causing any significant change in price.

Green Business - It operates in ways that solve, rather than cause both
enviromental & social problems. These businesses adopt principles, policites,
practices that improve quality of life for communities, themselves, customers, environment.

Leveraging - Investing with borrowed money as a way to amplify potential gains 
(at the risk of greater losses)!

Hedgefund - A flexible investment company for a small number of large 
investors (usually the minimum investment is $1 million). 

Mutual fund - An open ended fund operated by an investment
company which raises money that is invested in assets. 

Overhead - Business expenses.

Silent Partner aka Sleeping Partner-
A partner who provides capital but does not actively participate in the
management of operations.

Capital - cash or goods used to generate income by investing in business.

Asset - any item of economic value owned by an individual or corp, 
especially that which could be converted to cash. e.g. securities, inventory, property.