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ch 7 & 8 econ

business organization
what term is defined as an enterprise that produces goods or services, usually to make a profit
d
what does the term limited life mean?
a the business is restricted in size
b there is a ceiling on the amount of business expenses
c there are many regulations about business activities
d the business does not continue if the owner leaves
b
what do many people consider to be the chief advantage of sole proprietorship
a owner has unlimited liability
b owner keeps all profit
c owner has unlimited startup funds
d owner does not have to obey labor laws
sole proprietorship
what is a business owned and managed by a single person called
partnership
what is the term for a business that is co-owned by two or more people who agree on how responsibilities, profits, and losses will be divided
limited liability partnership
what is the term for a business in which none of the co-owners is responsible for the debts or mistakes of the others
c
what of the followings an advantage of persnership but not sole proprietorship
a few regulations
b easy to open and close
c specialization of skills
d limited life
monopoly
a market structure in which only one seller sells a product for which there are no close substitutes is called
natural monopoly
a monopoly in which the costs of production are lowest when only one firm provides output is called a
technological monopoly
a monopoly that exists bc a firm controls an invention
nonprice competition
using advertising to try to convince customers to buy one product rather than another is a form of
startup costs
the expenses that a new business pays to enter a market are called
natural monopoly
a public utility such as a water company is an ex of a
joins with another
a merger happens when a company
b
which of the following is a disadvantage of partnership but not of sole proprietorship
a unlimited liability
b potential for conlict
c limited life
d much stricter regulations
stockholder
what is the name for an individual who owns a share of a corporation and is entitled to part of its profits
public corporation
which of the following is a corporation that issues stock that can be freely bought and sold
c
what is one of the major disadvantages of corportations
a limited funds
b limited life
c loss of control
d unlimited liability
horizontal merger
what is it called when companies that produce the same product merge
franchise
angela opens a coffee shop which she owns and where she sells a national brand of gourmet coffee. she pays licensing fees to do this. what kind of business is this
a
which can be both an advantage and disadvantage of sole proprietorships
a owner has total responsibility for all decisions and financial obligations
b few gov regulations placed
c limited funds
d owner of a sole proprietorship keeps all business profits
b
which of the following businesses is most likely to be a sole proprietorship
a film studio
b dry cleaner
c kitchen appliance maker
d football helmet manufacturer
a
what of the following is a typical startup requirement for a sole proprietorship?
a obtaining a business license
b selling shares on stock market
c signing a contract with a partner
d hiring officers to run the company
technological monopoly
if a company controls a specific process for making windows it has a
geographic monopoly
the only gas station within a radius of 200 miles has a
sellers join to influence prices
a characteristic of imperfect competition is
b
which of the following is an example of specialization in a partnership
a one partner has more money to invest
b one partners bookkeeper other is gourmet chef
c one partner wants a neighborhood store, other prefers mall
d one partner doesn’t have liability for others debt
limited liability partnership
three certified public accountants form an accounting firm by pooling their investment money. none wants to be responsible if one of the others makes a serious financial error. what type of firm will they choose
a
which has potential to be an advantage and disadvantage of partnership
a joint decision making
b additional resources
c specialization
d few regulations
limited partnership
a inventor needs a huge amount of money to start a business but doesn’t want to give up control of the product is made. what business organization is he likely to choose
c
which of the following are advantages that corporations have over sole proprietorships and partnerships
a limited life limited liability
b limited life greater access to funds
c unlimited life limited liability
d umilimited liability greated access to funds
conglomerate
what is it called when several companies producing unrelated products merge
d
which of the followings an example of a vertical merger
a bread bakery acquires cookie company
b Chinese company acquires us company
c computer maker acquires a publisher
d shirt factory acquires button manufacturer
a
which of the followings an example of a franchise
a restaurant part of a national chain
b single gas station named arts fuel and service
c mom and pop grocery store
d one of 3 dry clearners owned by same man
d
which person is most likely to obtain a bank loan for her sole proprietorship
a just graduated from business school
b idea to market a trendy new product
c run up a lot of bills w supplies
d business earned profits for two years
a
if owner of sole proprietorship closes business while owning debts whats likely to happen
a sell home and use savings to pay debts
b creditors forgive debts bc business related
c deduct depts. on incone tax and get a big refund
d bank gives business loan to repay and restart
c
which statement is likely to be made by owner of sole proprietorship
a didn’t open business until saved enough money
b has more security running own business
c satisfaction of being my own boss is worth risks I take
d rely on gov loans and subsidies to stay in business
c
whats a common difficulty for new sole proprietorship
a paying all legal and gov fees required in first year
b finding enough workers to expand quickly
c enough money to stay in business while building customer base
d finding investors to purchase stock
a
example of general partnership
a jan and marie invest = money and share all prifts and loses
b bob runs businesss w money from bill carrie and laura
c p and r invest in business but neither responsible for others actions or debts
d lee makes all decisions but trung works just as many hours as lee
c
which of the following pairs of people with special skills are best suited to be business partners
a chef carpenter
b lawyer doctor
c dressmaker sales person
d gardener auto mechanic
c
why are doctors offices often run as limited liability partnerships
a bc investors cant take part in medical decisions
b bc recently graudated doctors have less money to invest in office
c so if one loses a malpractice suit the other doctors don’t have to help pay damages
d so office can stay open if one dr leaves to start own medical practice
a
which of the followings biggest difference bw sole proprietorship and partnership
a sp have more control over decision making
b partnerships have less access to funds
c sp have limited life
d partners at more risk of losing personal funds
a
why do corps sell stock
a raise money to invest in business
b involve more people in running business
c spread liability among larger group
d gain more diverse group of owners

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