Business - Businesses are private producing units in our society - Businesses in the U.S. decide what to produce, how much to produce, and for whom to Produce it. - Businesses produce what they believe will sell and make a profit - By channeling the desire to make a profit for the general good of society, the U.S economic System allows the invisible hand to work. - Although businesses decide what to produce, they are guided by consumer sovereignty Forms of Business - Proprietorship - Advantages - Minimum bureaucratic hassle - Direct control by owner - Disadvantage - Limited ability to get funds - Unlimited personal liability - Partnership - Advantages - Ability to share work and risk - Relatively easy to form - Disadvantages - Limited ability to get funds - Unlimited personal liability - Corporation - Advantages - No personal liability - Increasing ability to get funds - Ability to avoid personal income taxes - Disadvantages - Legal hassle to organize - Possible double taxation of income - Monitoring prooblems