econ chpt 8

Which of the following people may be considered a venture capitalist?

Lily gives money to her friend to help him start a business.

Which of the following is true of a sole proprietorship?

The sole proprietor has complete control over business decisions.

A corporation, but not the people who run it, can be sued. T/F?

True

A sole proprietor is fully responsible for all the firm's losses T/F?

True

An LLC can have foreign investors, but an S corporation cannot T/F?

True

An entrepreneur must turn an idea into a marketable product in order to earn a profit. T/F?

True

Entrepreneurs can tell if they are successful by examining their profits T/F?

True

Financial capital may be obtained from a bank. T/F?

True

In most cases, stockholders are said to have limited liability as owners of a corporation

True

Innovation is defined as the process of turning an invention into a marketable product. T/F?

True

Most for-profit businesses in the United States consist of one self-employed person. T/F?

True

Owners of a corporation have the right to vote for the board of directors T/F?

True

S corporations tend to be comparatively small. T/F?

True

what is the main difference between an S corporation and a limited liability company (LLC)

an s corporation cannot have any foreign investors while an LLC can

Which of the following would not benefit from innovation?

competitors who can't use the innovations because of patent restrictions

which of the following are subjected to double taxation

corporations

Which of the following is true of a partnership?

easy to start

Rita invents a new flavor for popcorn. She writes a business plan, buys equipment, and finds buyers for her new product. Which of the following terms best describes Rita?

entrepreneurs

______ have the most influence on driving the economy forward.

entrepreneurs

A cooperative must pay government taxes on its profits. T/F?

false

A partnership can only have two partners.

false

Because stockholders are not entrepreneurs, they do not accept the risk of a failing business. T/F?

false

By definition, all sole proprietorships have only one employee.

false

It is not necessary for a not-for-profit organization to generate any income.

false

Limited partners do not have to share profits with anyone else

false

Most sole proprietors work in the agriculture industry.

false

Owners of corporations have more control over business decisions than sole proprietors. T/F?

false

Partnerships are based on articles of partnership.

false

Stockholders of a corporation must specialize in their company's business. T/F?

false

Which of the following people is the least liable in a business?

limited partner

Maria, who knows nothing about manicures, makes financial contributions to her friend Amy's manicure business. Amy manages the day to day operations and has unlimited liability. Which term most accurately describes the business?

limited proprietorship

Under which category does the American Red Cross fall?

not-for-profit organization

Under which of the following categories do most private colleges fall?

not-for-profit organization

Which of the following is a disadvantage of a partnership?

partners must share profits

How does a limited liability partnership (LLP) differ from an LLC?

partnership is more easily converted to an LLP than an LLC

both sole proprietors and partnerships

pay comparatively low taxes

Which do sole proprietorships and partnerships share?

pay lower taxes

If dairy farmers joined forces to buy equipment and market their products, into which category would their business fall?

producer cooperative

Entrepreneurs rely the most on ______ to indicate that a business is successful.

profits

Which of the following is not an example of a hybrid business? a. publicly traded corporation b. limited liability company c. S corporation d. limited liability partnership

publicly traded coorporation

Because they accept risks, ______ usually are entrepreneurs.

self-employed inventors

which of the following is a true entrepreneur?

the founder of a publishing company

The word limited in limited partnership pertains to

the partners' liability for loss should the company fail

A self-employed dentist is an example of a sole proprietor. T/F?

true

An LLC has more financial flexibility than an S corporation. T/F?

true

An existing partnership has the option of converting to a limited liability partnership. T/F?

true

Corporations account for the majority of business sales. T/F?

true

Entrepreneurs can improve people's standards of living T/F?

true

If someone copies a successful business, he or she can still be considered an entrepreneur. T/F?

true

In a general partnership, each partner is personally responsible for paying all business debts.

true

Liability is the legal obligation to pay any debts of the business.

true

Real estate firms account for almost half of all partnerships. t/f?

true

The sole proprietorship is the simplest form of business organization. T/F?

true

what is the first step in forming a corporation?

Articles of incorporation are written

Which of these is not an example of an entrepreneurial business?

A church group holds a bake sale to fund an upcoming mission trip.

Who is a sole proprietor?

A private academic tutor

Which of these is not true of an entrepreneur?

An entrepreneur does not have to accept the risk of failure.

Which of the following scenarios is not considered a creative change that an entrepreneur might introduce into the market?

Billy opens a home-improvement store that stocks the same products as other home improvement stores.

Bonita hears about a new company that produces a new type of soft drink. She decides to buy stock in the company and makes arrangments through Todd, the CEO of the company. Todd reports the news of the new shareholder to Bob, the company's founder and Todd's boss. Bob then calls to tell Monica, who works in the lab developing the new soft drink, the good news. Who is an entrepreneur?

Bob

Which scenario is not considered a creative change that an entrepreneur might introduce into the market?

Bob opens a grocery-store chain that sells products similar to those sold by other chains.

The number of U.S. patents granted has decreased in recent decades. T/F?

False

A partnership faces many government regulations

False

A person is not considered an entrepreneur unless he or she invents a new product. T/F?

False

A sole proprietor must share any profits with share holders T/F?

False

As long as an entrepreneur's business earns a profit in the short run, competitors and substitutes will naturally follow. T/F?

False

Because stockholders assume the risk of a company's success or failure, they are considered entrepreneurs T/F?

False

Sole Proprietorships always have higher tax rates than corporations T/F?

False

The Red Cross is an example of a consumer cooperative. T/F?

False

The goal of a not-for-profit organization is to earn money for its shareholders

False

A(n) ______ has both limited liability protection and single taxation.

S corporation

Which is true of a publicly traded corporation?

Stocks can be bought and sold through a stock exchange.

identify in the appropriate order the steps involved in forming a corporation

The corporation writes the articles of incorporation, if the articles comply with the law, a charter is then issued and corporation becomes a legal entity.

Which of these is a true entrepreneur?

The founder of a company

Suppose wheat farmers join together to buy equipment for their farming needs. Under which category does this example fall?

a producer cooperative

discuss the advantages and disadvantages of sole proprietorships

advantages: it is easy to start, you have complete control, and there is lower taxes disadvantages: unlimited personal liability, difficulty finding and keeping good workers, and broad resoponsibility