Chapter 3.2

Which of the following exemplifies a producer cooperative?

A group of pomegranate producers pooling resources to advertise their products.

Which of the following statements is true of a sole proprietorship?

A sole proprietorship has a single owner who enjoys the firm's profit and bears unlimited liability.

A _____ is a retail business owned and operated by some or all of its customers in order to reduce costs.

Consumer cooperative

Which is the most important form of business organization in terms of total sales?

Corporation

Which of the following is an advantage of corporations?

Corporations can survive even if ownership changes hands.

Before the modern manufacturing firm evolved during the Industrial Revolution in Great Britain, entrepreneurs relied on "putting out" production to rural households, which came to be known as the _____ system.

Cottage industry

Which of the following is a regular household least likely to do on its own?

Dental work that requires expensive specialized equipment and medical training.

Which of the following is true of household production?

It helps avoid high taxes unlike most market transactions.

Which of the following is true of the Industrial Revolution?

It led to the development of large-scale factory production.

Households with a _____ are more likely to perform household chores such as sweeping and cooking.

Lower opportunity cost of time

Economists assume that households try to maximize utility and firms try to:

Maximize profits.

Which of the following is true of a partnership?

Partners find it easier than sole proprietors to raise funds for the business.

An S corporation:

Reduces the impact of double taxation for its shareholders.

In the United States, a _____ is the most important type of firm in terms of sheer numbers.

Sole proprietorship

Which of the following is an example of a consumer cooperative?

Students operating college bookstores where members receive discounts on their purchases.

Which of the following is an example of a not-for-profit organization?

The American Museum of Natural History, an organization that relies on tax-deductible memberships and donations for funding

An entrepreneur's reward is calculated as:

The difference between the sales revenue and the cost of production, which includes the opportunity cost of the entrepreneur's time.

Which of the following is a disadvantage of a sole proprietorship?

The proprietor has unlimited liability.

Which of the following is true of cooperatives?

They are usually granted tax-exempt status.

Which of the following statements is true of not-for-profit organizations?

They earn revenue from a combination of voluntary contributions and service charges.