Chapter 8 Economy
what percentage of all businesses are partnerships
7 percent
what percentage of the net income earned in the united states is generated by corporations
70 percent
why is it easier for a partnership to borrow money and to hold good employees than it is for sole proprietorship to do so
a partnership has more personal stability and access to more moeny
what is a fringe benefit
a payment other than wages or salaries
what are royalties
a percentage of a franchise's earnings paid to the parent company
an agricultural marketing organization that helps members sell their products is called
a producer cooperative
a business owned and managed by a single individual is called
a sole proprietorship
an arrangement whereby cities and towns designate separate areas for business is called
a zoning law
if a general partnership fails, who is responsible for the debts
all of the partners
multinationals are different from other corporations in that they
are citizens of several nations at the same time
the legal document spelling out the details of a partnership agreement are called
articles of partnership
money and other valuables belonging to an individual or business are called
assets
what are the money and other valuables that belong to a corporation or partnership called
assets
a license to form a corporation issued by a state government is called a
certificate of incorporation
a corporation that issues stock to only a few people, often family members is called a
closely held corporation
the portion of corporate profits paid out to stockholders are called
dividends
a sole proprietor
does not have to pay a separate business tax
how is general partnership organized
every partner shares equally in both responsibility and liability
museums, public schools and YMCAs are all
exempt from paying income taxes
a business fails and the owners lose their investment in the company, along with their homes, automobiles, and other personal property. the owners are
general partners in a general partnership
a business in which all partners share in both responsibility and liability is called
general partnership
a partnership in which partners share equally in both responsibility and liability is called a
general partnership
the combination of two or more firms competing in the same market with the same good or service is called a
horizontal merger
an advantage of a merger between two companies is
improved production and efficiency
what is the difference between a limited partnership and a limited liability partnership
in a limited liability partnership all partners are limited from liability in some situations
which of the following is an advantage of a sole proprietorship
it is the least regulated form of business organization
what type of economic institution engages in collective bargaining
labor unions
which of the following is a disadvantage of a sole proprietorship
lack of permanence
the legal obligation is pay debts is called
liability
the legally bound obligation to pay debts is called
liability
one advantage enjoyed by a corporation is
limited liability
a business in which all partners are limited from personal liability in certain situations is called a
limited liability partnership
a partnership in which all partners are limited partners is called a
limited liability partnership
a business in which only one person has unlimited personal liability for the business's actions is called
limited partnership
a partnership in which only one partner is required to be a general partner is called a
limited partnership
what are assets
money and other valuables
a large corporation that produces and sells its goods and services throughout the world is called a
multinational corporation
all of the following are true of multinational corporations EXCEPT
multinationals are a type of business organization that has no weakness
if a sole proprietorship fails the owner of the business
must pay all the business debts
what are organizations that are in the business or benefiting society and operate like a business called
nonprofit orgainzation
an institution that functions much like a business but does not operate for the purpose of generating profits is called a
nonprofit organization
the function of a retail or purchasing cooperative business or "Co-op" is to
obtain lower prices for its members
the function of a retail or purchasing cooperative business or "co-op" is to
obtain lower prices for members
a business organization owned by two or more persons who agree on a specific division of responsibilities is called a
partnership
a common factor in all nonprofit businesses is that they
perform charitable acts
a agricultural marketing cooperative that helps members sell their products is called a
producer cooperative
which of the following characteristics does a nonprofit organization NOT have
profits
a corporation that sells stock on the open market is called a
publicly held corporation
a share of the earnings given as payment to a franchiser is called a
royalty
the securities and exchange commission (SEC) supervises and regulates the
sale of corporate stock to the public
an example of a nonprofit organization is a
school
corporation raise large sums of money by
selling stock in the company, borrowing money, selling bonds
a cooperative that provides a service rather than a good is called a
service cooperative
a business owned and managed by a single individual is called a
sole proprietorship
a certificate of ownership in a corporation is called
stock
a share representing ownership in a corporation is called
stock
a legal agreement that sets out each person's rights and responsibilities in a particular partnership is called
the articles of partnership
a major advantage of sole proprietorship is that
the owner is completely responsible for the business decisions
all of the following are disadvantages of a franchise business EXCEPT
the parent company's guidance on running the business
what is the major advantage of a business that is a partnership rather than a sole proprietorship
the responsibility for the business is shared
what does limited liability of the owners of stock in a corporation mean
the stockholders of a corporation can lose only what they have invested in the corporation
what does the limited liability of the owners of stock in a corporation mean
the stockholders of a corporation can lose only what they have invested in the corporation
a uniform state law adopted by most states to establish rules for partnerships such as common ownership interests, profit and loss sharing and shared management responsibilities is called
the uniform partnership act
in return for a fee to a franchiser, a business owner receives the right
to sell the franchiser's goods and services
a nonprofit organization that promotes the interest of a particular industry is called a
trade association
the ______ is the state law that establishes rules for partnerships
uniform partnership act
which of the following is NOT characteristic of the corporate form of organization
unlimited liability
all of the following are major advantages of a sole proprietorships EXCEPT
unlimited personal liability
all of the following are major advantages of sole proprietorship except
unlimited personal liability
a joining of two or more businesses that are involved in different stages of producing the same good or service is called which of the following
vertical merger
the combination of two or more firms involved in different stages of producing the same good or service is called a
vertical merger
what is the term for the joining of two or more firms involved in different stages of producing the same good or service
vertical merger
a law in a city or town that designated areas for residency and for business is called a
zoning law
what is a major reason for conglomerate mergers
diversifiation
a certificate issued by a corporation promising to repay the amount it has borrowed is called
a bond
an authorization from the local government to carry on an enterprise is called
a business license
what defines a corporation
a business owned by individual stockholders
which of the following is NOT a common reason for a business combintaton
a business wants to change its name
which of the following is an example of a merger
a company combines with a company that supplies it with raw materials
which of the following is a business organzation owned by a group of people for their mutual benefit
a cooperative
what is the major difference between a corporation and other kinds of busninesses
a corporation has a separate entity apart from that of the owners and workers
the portion of corporate profits paid out to stockholders is called
a dividend
a payment other than wages or benefits is called
a fringe benefit
a payment to employees other than wages or salaries is called
a fringe benefit
the joining of two or more firms competing in the same market with the same good or service is called
a horizontal merger
what is a certificate of incorporation
a license to form a corporation issued by the state government
a major disadvantage of sole proprietorship is that
banks are often unwilling to lend money to the business
a major disadvantage of the sole proprietorship is that
banks are often unwilling to lend money to the business
a formal contract to repay borrowed money with interest at fixed intervals is called a
bond
a semi independent business that pays fees to a parent company in return for the exclusive right to sell a certain product or service in a given area is called a
business franchise
the authorization to start a business issued by the local government is called a(n)
business license
an establishment formed to carry on commercial enterprise is called a
business organization
any establishment formed to carry on commercial enterprises is a
business organization
a _______ is a combination of more than three businesses that makes unrelated products
conglomerate
a business combination merging more than three businesses that make unrelated products is called a
conglomerate
a retail outlet owned and operated by consumers is called a
consumer cooperative
a business organization owned and operated by a group of individuals for their mutual benefit is called a
cooperative
a legal entity owned by individual stockholders is called a
corporation
which type of business organization faces the most government regulation
corporation
which type of business organization faces double taxation
corporations
