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