ECN 1015 Chapter 5
What percentage of American businesses is considered small businesses?
99.7
With set-aside programs for small businesses, up to _____of certain government contracts are designated for small businesses.
23
What percentage of small businesses survives the first five years of operations?
50
Most manufacturing businesses are considered small if they employ fewer than _____ workers.
500
Which of the following is not a benefit to the franchisor in a franchise agreement?
A franchisor is in control of the daily operations of a much larger business
Which of the following is most likely to be a cooperative business operation?
A group of neighboring farm owners
How does a partnership differ from a sole proprietorship?
A partnership is more difficult to dissolve than a sole proprietorship
Which type of business is most likely to operate as a cooperative business?
Agricultural
Which of the following is NOT an advantage of a corporation?
Double taxation on corporate earnings
Why do home-based businesses often have lower costs?
Funds that are not being used for leasing or warehouse space can be directed into the business
What characterizes a small business?
It is independently owned and operated and is not dominant in its field
Which of the following is true of a franchisor?
It usually stipulates the purchase of certain ingredients or equipment, pricing, and marketing efforts
Which of the following risks does the franchisor take on in a franchise agreement?
Loss of control over every aspect of the business
Which is the most common form of business ownership?
Sole proprietorship
Which of the following is a major draw-back of family-owned businesses?
Succession
Which of the following is an advantage of mergers?
They allow a company to diversify and increase customer base.
Which best describes the contribution of U.S. small businesses in world markets?
They export nearly a third of all U.S. products each year
Which of the following is true of S Corporations?
They have fewer than 100 shareholders
Which of the following is true of owners of common stock?
They have voting rights but only a residual claim on the firm's assets
An effective business plan should include:
all of these answers are correct
Small businesses often fail due to:
all of these answers are correct
_____ is an organization that provides temporary low-cost, shared facilities to small start-up ventures.
business incubator
A written document that provides a statement of a company's goals, methods for achieving goals, and standards for measurement is called:
business plan
A legal organization with assets and liabilities separate from those of the owner is called:
corporation
Cooperatives allow members to:
doo all of these
A corporation that does business in states other than the state in which it filed incorporation papers is called a(n):
foreign corporation
A(n) _____ combines firms in the same industry that wish to diversify, increase their customer base, cut costs, or offer expanded product lines.
horizontal merger
Which industry listed below is NOT dominated by small businesses?
hospitals
A(n)_____ consists of two or more firms combined to form one company.
merger
Small-business loans often used to buy equipment or operate a business are called:
microloans
Which of the following is least likely to be a small business?
nursing home
The primary purpose for developing a business plan is:
obtain financing for business
Amtrak is an example of:
private ownership of a for-profit corporation
Which of the following is not one of the customary services of the Small Business Administration?
providing direct loans
Who owns the corporation?
shareholders
Which of the following does not grant direct loans to small businesses?
small business administration
_____ out of every three new jobs are created by small business.
two
A merger between two companies in different levels of the production and marketing of a product is called a(n) _____ merger
vertical
Small businesses are more likely than large ones to hire:
youngest workers
