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Business organization
Business organization
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Types of Businesses, monopolies
Flashcards
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Answers
1
The MOST LIKELY incentive for entrepreneurs to start a new business is
to discover a new patent.
to risk financial failure.
to create a new social benefit.
to make a profit.
2
A free enterprise system, what drives individuals to risk their savings in a business venture?
the potential for profit
the increase in stock prices
the idea of failure
the desire to pay taxes
3
One of the BEST measures of success for businesses and their entrepreneurs is
marginal cash
profit
marginal revenue
loss
4
A corporation is LEAST LIKELY to have which advantage?
limited liability of stockholders
establishment of price ceilings
ability to raise capital
ability to sell stock
5
Which market has no competition
oligopoly
monopoly
perfect competition
monopolistic competition
6
Which market structure has the largest number of suppliers?
perfect competition
monopolistic competition
oligopoly
monopoly
7
If a drug company is granted a patent on a new medication, which result is possible?
a monopoly in the production of that medication
a price ceiling
perfect competition in the market for that drug
government control of that drug
8
Why is entrepreneurship often difficult?
There is a risk that the new business may fail.
Motivation for profit may not be the best incentive.
There are laws that restrict most new businesses.
Healthy competition encourages higher quality products.
9
A utility (such as a power company) which controls all services in a designated area is called
natural monopoly
devised oligopoly
trust
cartel
10
Granting operating licenses to one television company to be the only provider is called a
monopolistic competition
pure competition
oligopoly
monopoly
11
Jim is liable for all the debts of his company. He has which type of business organization?
conglomerate
sole proprietorship
corporation
monopoly
12
What is the PRIMARY reason natural monopolies are allowed to exist in areas like energy
it would be more useful to allow competition
it is more efficient for one company to be in control
it would be too difficult to regulate these industries.
not in the public interest to deregulate the utilities
13
Which of these is the best economic definition of "pure competition"?
the market is dominated by two or more sellers
the market is dominated by one seller
the market is dominated by a few buyers
the market is not dominated by either buyer or sellers
