Let Firms be TradedCitizenship: Consumer Economics

About the Unit

• In the Consumer Economics Unit we will be exploring the following questions:

• How do banks and other financial institutions make money?

• What is a public company?

• What are public services?

• What is the purpose of education?

• Why is employment important?

• What effect does income inequality have?

Public Companies• Public companies differ from private companies in

that the ownership is shared among people and additional funds can be raised by selling additional shares of ownership in the business.

• Private Companies - Private companies are businesses that are owned by single person or family, and thus that person or family takes both all the risk and rewards associated with the business.

• Public Companies - Public companies are businesses that are owned by a group of people, and thus the risk and rewards associated with the business are shared amongst the owners depending how much of the company they own, usually measured in shares of stock.

Video

•https://www.youtube.com/watch?v=GnJCOof2HJk

•https://www.youtube.com/watch?v=F3QpgXBtDeo

Historical Examples

• 1500’s - Governments grant exclusive trading rights to merchants in certain areas.

• 1552-1571 - First stock exchanges where people can be stock in companies are established in London, UK and Antwerp, Netherlands.

• 1680’s - Stock Brokers meet in London, UK coffee shops to negotiate the selling and buying of stocks.

• 1844 - The UK government makes it much easier for companies to sell stocks to investors.

• 1855 - The UK government introduces limited liability corporations to protect people from being taken advantage of if companies they own stock in fail.

Summary

• Public companies differ from private companies in that the ownership is shared among people and additional funds can be raised by selling additional shares of ownership in the business.