What do many people consider to be the chief advantage of sole proprietorships?

The owner keeps all of the profits

What is a disadvantage of being a franchise owner?

Sharing the profits with the franchiser

Who is most likely to look for limited partners?

Someone who needs money but wants to retain control of the business

What is a General Partnership?

A business in which the partners share management & liabilities

Why do corporations sell stock?

To raise money to invest in the business

Why do the owners of a corporation have a different level of liability than a sole proprietor does?

because a corp. is a legal entity separate from its owners

Which of the following are characteristics of sole proprietorships?

Limited Life, Unlimited Liability

What are some of the advantages that partners can bring to a business?

Extra funds and specialized knowledge

2 advantages that corporations have over sole proprietorships & partnerships

Unlimited Life, Limited Liability

Which of the following is a major advantage of owning a franchise?

Selling a product that consumers know

What does "double taxation" mean?

The gov't taxes corporate profits and also shareholder dividends

What does the term "limited life" mean?

The business does not continue if the owner leaves

Which of the following is an example of a vertical merger?

A shirt factory acquires a button manufacturer

What is a cooperative?

A business operated for the shared benefit of its owners, who are customers

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Honors Econ Chapter 8- Business Org's

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Questions 30

Answers

1
Which of the following is a disadvantage of a partnership but not of sole proprietorships?
Limited Life
Much stricter regulations
Potential for conflict
Unlimited Liability
2
What is it called when several companies producing unrelated products merge?
Conglomerate
Vertical Merger
Horizontal merger
Multinational corporation
3
What type of organization is a credit union?
Service Cooperative
Franchise
Producer Cooperative
Consumer Cooperative
4
What do many people consider to be the chief advantage of sole proprietorships?
The owner keeps all of the profits
The owner has unlimited startup funds
The owner does not have to obey labor laws
The owner has unlimited liability
5
What is it called when companies that produce the same product merge?
Conglomerate
Multinational corporation
Vertical Merger
Horizontal Merger
6
What is a disadvantage of being a franchise owner?
Receiving very little business training
Selling an untested product
Having competing goals with the franchiser
Sharing the profits with the franchiser
7
Who is most likely to look for limited partners?
Someone who needs assistance w/ day-to-day management
Someone who needs money but wants to retain control of the business
Someone who wants to share liabilities/ debts if the business fails
Someone who needs money and management advice
8
Around __% of businesses in the U.S. are sole proprietorships, but they only account for about ___ % of all sales.
50; 25
70; 5
60; 10
90; 2
9
Name for a contract in which a corp. promises to repay borrowed money, plus interest, on a fixed schedule.
Stock
Share
Dividend
Bond
10
What is one of the major disadvantages of corporations?
Unlimited Liability
Loss of control by owners
Limited Life
Limited funds
11
What is a General Partnership?
A business in which one partner acts as a general manager
A business in which none of the partners are liable for debts of others
A business in which the partners share management & liabilities
A business where one partner is not involved in management & has lim. liab.
12
What is a typical requirement of a consumer cooperative?
Working without a salary
Maximizing profit
Paying a membership fee
Paying a licensing fee
13
Which of the following is an example of an advantage of partnership but not of sole proprietorships?
Limited Life
Few regulations
Specialization of skills
Easy to open and close
14
Why do corporations sell stock?
To gain a more diverse group of owners
To spread liability amongst a larger group
To raise money to invest in the business
To involve more people in running the business
15
Why do the owners of a corporation have a different level of liability than a sole proprietor does?
because there are no owners, only stockholders
because a corp. can usually afford to hire better lawyers
because a corp. is a legal entity separate from its owners
because there are many more owners
16
Which of the following are characteristics of sole proprietorships?
Unlimited Life, Limited Liability
Unlimited Life, Unlimited Liability
Limited Life, Unlimited Liability
Limited Life, Limited Liability
17
Who is responsible for the day-to-day running of a corporation?
Stockholders
Board of Directors
Original owners
Corporate officers
18
What are some of the advantages that partners can bring to a business?
Extra funds and unlimited business life
Extra funds and specialized knowledge
Specialized knowledge and unlimited business life
Extra funds and more government oversight
19
A business in which none of the co-owners are responsible for the debts or mistakes of the others.
Limited Partnership
Limited Liability Partnership
General Partnership
Partnership
20
2 advantages that corporations have over sole proprietorships & partnerships
Limited Life, Limited Liability
Unlimited Liability, greater access to funds
Limited Life, greater access to funds
Unlimited Life, Limited Liability
21
Which of the following is a major advantage of owning a franchise?
Decorating a business the way you want
Having complete control over the product
Being free from all oversight
Selling a product that consumers know
22
Which has the potential to be both an advantage & disadvantage of partnerships?
Joint decision making
Additional resources
Few regulations
Specialization of skills
23
What term is defined as an enterprise that produces goods or services, usually to make a profit?
Business Organization
Horizontal Merger
Stock
Vertical Merger
24
What does "double taxation" mean?
Both the U.S. and foreign gov'ts tax multinational corp's.
The gov't taxes both partners in a partnership
The gov't taxes corporate profits and also shareholder dividends
The government taxes sole proprietorships at higher rates
25
What does the term "limited life" mean?
There are many regulations about business activities
There is a ceiling on the amount of business expenses
The business does not continue if the owner leaves
The business is restricted in size
26
Which of the following is an example of a vertical merger?
A computer maker acquires a publishing company
A shirt factory acquires a button manufacturer
A Chinese company acquires a U.S. company
A bread bakery acquires a cookie company
27
Which business is most likely to be a limited liability partnership?
A restaurant
A beauty salon
A clothing store
A doctor's office
28
A corporation that controls who can buy or sell their stock?
Public
Conglomerate
Franchise
Private
29
What is a cooperative?
A business that licenses the right to sell its products in a certain area
A semi-independent business that buys the right to run a franchise
An institution that acts like a business org. but does not make a profit
A business operated for the shared benefit of its owners, who are customers
30
A group of organic farmers join together to market their produce. What is this an example of?
Producer Cooperative
Non-profit organization
Franchise
Consumer Cooperative

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