business foundations

Adams smiths view of best serving society

individuals in the country may pursue their own economic gain and self interest by doing whats best for them invisible hand

a partnership formed to operate for a specific time period or to accomplish a specific purpose is known as a

joint venture

Advantages of a corporation

limited liability, ability to raise capital and transfer ownership

hostile takeover

management and board of directors of a firm targeted for acquisition disapprove of the merger

perfect competition is characterized by

many buyers and sellers

The federal reserve uses _____ when it lowers the interest rate charged to banks on short term loans

monetary policies

as a limited partner in a construction business, Joe

only risks his initial investment

During which phase of the business cycle would a company like General Ecelectic introduce new products

peak

which of the following is not a characteristic of an oligopoly?

perfectly elastic demand curves

A _____ is a merger between firms operating at different but related levels in production and marketing of a product

vertical merger

The top governing body of a corporation is known as the

board of directors

the forms of a business organization that experiences double taxation is the

corporation

What does double taxation mean?

Companies must pay taxes on their earnings, and then stockholders pay taxes on their dividends.

Disadvantages of a corporation

-double taxation -cost of setup -government regualtion -lack of privacy

a guaranteed SBA loan may be as large as

5 million?

Which form of franchising is the most common today?

A franchisor supplies brand names, techniques, or other services instead of a complete product.

Entrepreneur

A person who risks time and money to start and manage a business

Which of the following industries would most likely have the characteristics of an oligopoly?

Automobile manufacturing

To compare the productivity of the United states to that of japan, one should examine their

Gross domestic product, GDP

The US, who's economy exhibits elements of both capitalism and socialism, has what is known as a ______ economy

Mixed

a _______ purchases products in quantity from manufacturers and then resells them to retailers

Reseller

Tyler would like to own a train store and operate it by himself. He has enough money to open it and operate it on his own and elects to do so. What form of business is this?

Sole proprietorship

Johnathan serves on foot lockers board of directors. How did Johnathan get this position?

Stockholders elected him

Teenage Entrepreneurship is growing especially in the _____ industry

Technology

kroger grocery stores would most likely be classified as

a chain

Deflation

a general decrease in the level of prices

Inflation

a general increase in prices and fall in the purchasing value of money.

The SBA makes special effort to

assist those minority groups who want to start small businesses or expand existing ones.

Advantages to franchisee

can start business with limited capital, receives advice/materials, minimal cost of advertising

Mars, Inc., maker of M&Ms and other candy, is 100 percent owned by the Mars family and is therefore referred to as a(n)

closed corporation

The producer price index is the accurate predictor of

consumer price index

Phillip and Dwight' s train store has grown to the point that they need more capital to expand the current location and to open stores in other cities. They do not want the liability of taking out a loan and are no longer concerned about government oversight but would still like to maintain limited liability. They would most likely form a -

corporation

You stop at a SUBWAY to get a sandwich for lunch and you notice that they now have TCBY yogurt. This is an example of a

dual branded franchise

according to economists, natural resources, labor, capital, and entrepreneurship are called

factors of production

Sears Holding Corporation is incorporated in Delaware, but when it operates in Illinois and Texas, it is considered a(n) ____ corporation in those states.

foreign corporation

In a franchise business, the party paying the franchise fee is known as the

franchisee

Joel decides to purchase and operate a subway. Joel is the

franchisee

what is a characteristic of Lassiez Faire capitalism?

fundementals are capitalism and free market economy function best when there is no interference from the government

Advantages to the franchisor

has more capital, fast distribution, can ensure management to own standards

If Pizza Hut and Papa John's Pizza united to become the new company of Papa Huts, what transaction created this new company?

horizontal merger

what is the primary reason that so many new businesses fail

poor management

Bryan applies for a small business loan from the SBA. If he is approved for the loan, where will the actual money come from?

private lenders

The main reason that there are fewer production industries than distribution or service industries is that

production industries need a large initial investment

Daniels business constructs storage sheds for new housing developments requested by the builder. Daniels business would best be classified as a

production?

Common stock carries all of the following right except

receive dividends first

economist define a _______ as two consecutive three month periods of decline in a country's gross domestic product

recession

Maria owns and operates a catering business. This is an example of a

service business

productivity can best be described as

the average level of output per worker per hour