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

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

what is a major reason for conglomerate mergers

diversifiation

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