Vocabulary
 Sole-Proprietorship- A business owned by a single person.
 Partnership- A business owned by 2 or more people.
 Corporation- A business that is owned by its stockholders
(people who buy company stock).
 Labor Union- Group of workers that unite to attempt to get
better pay and working conditions.
 Arbitration- Method of conflict resolution where a 3rd party
listens to each side and then makes a decision.
 Lockout- When employees are prevented from attending
work. (NFL)
review
 Why is it that Monopolies are considered bad for our economy?
 How are Monopolies sometimes good for our economy?
 How are American Anti-Trust Laws an example of a mixed-market
economy?
 What is an oligolopoly?
 What is a conglomerate?
 What is the differerence b/w a horizontal and vertical merger?
Warm Up
 Why has the U.S. Gov’t created laws in
order to prevent monopolies?
Types of
Businesses
Sole Proprietorship
 Business owned by a single
person
 Ex: Pizza place, beauty
salon
 Easiest form of business to
set up. Anyone can start one.
Advantages
 Owner receives all
the profit & makes all
decisions.
Disadvantages
 Unlimited Liability
 The owner is
financially responsible
for all problems
 Limited Life
 Function only when
the owner does
 Difficult to raise
financial capital
 Small Business
Administration
Partnership &
Cooperatives
 Partnership
 Business owned by 2
or more people.
 Ex: Law firms &
Doctors offices
 Cooperatives
 Involves much more
people than a typical
partnership
 Board of Directors
elected by owners to
oversee company
Advantages
 Easier to raise
financial capital due
to multiple owners
 Each owner brings
special skills and run
different parts of
business.
Disadvantages
 Difficult to reach
decisions that satisfy
everyone
 Difficult to dissolve
partnership if it
breaks apart
 Unlimited Liability
Corporation
 A business recognized
by law that has many
similar rights to an
individual.
 Ex: Own property
 Owned by shareholders
who buy stock in the
company.
 Shareholders elect a
Board of Directors to run
company
Advantages

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Easy to raise financial capital
 Sells stock & bonds
 Bonds are a means of
borrowing money. In
addition to cashing in the
bond at a later date the
person also collects
interest
Limited liability
 Owner not responsible for
debts
 Shareholders can only lose
what they invest
Unlimited life
 Ownership can be easily
transferred.
Disadvantages
 Business owners
have little say in how
business runs
 Double taxation
 Corporation is taxed
based on profits
 Shareholders must
pay taxes on any
Dividends or Capital
Gains
Franchises
 Sole Proprietors or
Partnerships purchase the
rights to a trademarked
corporation
 McDonalds
 Advantages
 Name recognition and
support of national
corporation
 Disadvantages
 Uphold “chain” identity
and sell only certain
products
What are Labor Unions?
 A group of workers
that unite to get
better pay and
working conditions.
 Engage in Collective
Bargaining
What are the Two types of
Unions?
 Craft/Trade Unions
 Workers who have
the same skills.
 Ex: Plumbers,
Teachers, NFL
 Industrial Unions
 Workers with different
skills who make one
product.
 Ex: Construction, Car
Factories
Labor Union Legislation
 Labor Union Relations Act
1935
 Gave employees the right
to join unions
 Fair Labor Standards Act
1938
 Restricted child labor,
granted minimum wage,
regulated workplace
safety
 Social Security Act 1935
 Provided income to
retirees and
unemployment benefits
Unfavorable Legislation
 Taft-Hartley Act 1947
 Prohibited closed shops
 Workplaces that could
only hire union
members
 Union Criticism
 Minimum wage
 Leads to increased
unemployment
 Hurt quality
 Difficult to fire union
members for poor
performance
Labor Management
Conflict
 Let’s say the union workers and the boss
are having problems. The workers want
higher wages but the boss refuses to
pay. What are the steps are actions they
must go through to solve their problem?
At each step the problem can be solved
but if it isn’t the next step is needed.
1.
Collective bargaining
 Boss and workers try to
come up with an agreement.
2. Mediation
 Bring in a third party to help
create an agreement.
3. Arbitration
 Third party makes an
agreement for them.
4. Strike
 Refuse to work.
Lockout
 Boss refuses to let workers in
building until they accept the
terms.
 If the problem led to a
strike or lockout most
likely workers will lose
because the boss can
always get someone
else to do the work. But
sometimes a strike does
work and the workers
get what they want.
Reflection
 Name at least one advantage and disadvantage
for each of the following business types:
 Sole proprietorship
 Partnership and cooperatives
 Corporation
 Franchise
 What are two types of labor unions?
 Name at least one advantage and one
disadvantage of labor unions.
Activity
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***Your business must be school appropriate! Your business may NOT focus on Drugs, Sex, or
Alcohol***
Instructions: Using your notes and the textbook (p.480-485) Create a poster or pamphlet that
describes your business. You must include the following criteria.
Create a name for your business
Answer the 3 questions all businesses must answer:
 What will you produce?
 How will you produce the product? (How will you make it…assembly line, cottage industry,
computers, etc?)
 For whom will you produce it? (Who will be your target audience?)
How will you use the 4 factors of production?
 Identify the 4 factors, give a brief definition, and how you will use each factor in your
business
 For Labor describe a job for each type of labor: White/Blue Collar, Skilled/Unskilled
Type of Business: Sole Proprietorship, Partnership, or Corporation
 Explain why you chose the business model. Discuss the advantages
 Explain the challenges you may face ahead. Discuss the disadvantages you will have
Include pictures that will make your business come alive
Closing?
 Name 1 positive and 1 negative about
Labor Unions.