Econ Topic 5 Test Short Answer Questions

Why do economists say that corporations are subject to double taxation?

Corporations pay a tax on their income and stockholders pay a tax on their dividends and capital gains, so the government is receiving two payments from one corporation.

How has the revolution in computers changed the way workers do their jobs? Provide at least one example.

Computers have made jobs more efficient and versatile. For example, teachers are now able to communicate with their students and post assignments online even if they are not present at school.

A friend says that when two people form a general partnership, it is just like two sole proprietorships working together to run the same business. Do you agree or disagree and why?

For the most part I agree, however, the liability, responsibility, and profits are split among the partners instead of receiving full benefits and disadvantages.

Why has membership in labor unions declined?

Labor unions have declined because the government has enforced laws that protect most things that the unions once fought for.

What are two advantages and two disadvantages of being a sole proprietor?

The advantages are that you get to keep all of of the profits and the owner has full control. The disadvantages are that you are fully responsible for all business debts and you may have to sell personal property to cover the costs of debts.

Compare the typical start-up costs of a sole proprietorship with those of a business franchise. Which are higher and why?

The start-up costs for a sole-proprietorship is higher than those of a business franchise. In a sole proprietorship you must buy all of the capital and the training needed to start your business, but in a franchise the parent company helps you cover these costs.

What allows a corporation to produce and sell goods on a large scale?

They have more access to capital and resources so they can produce more goods.

A fad shifts the demand curve for a toy to the right. When the fad ends, the demand curve shifts back to the left. How are these shifts likely to affect the toy manufacturer's demand for labor?

When the demand for a toy is high, the demand for workers is also high because more workers are needed to provide for the increase in demand of the toy. When the demand for the toy shifts to the left, the demand for workers will also decrease because they are no longer needed.

What role do demand and supply play in the level of wages a worker can expect to receive?

When the demand for workers is high and the supply of workers is low, the wages will be high. When the demand for workers is low and the supply of workers is high, the wages are low.

In your opinion, does offshoring increase the U.S. unemployment rate more than outsourcing? Why or why not?

Yes, because offshoring is moving the jobs to a destination outside of the U.S. which while cause the U.S. unemployment to increase. Outsourcing keeps the jobs in the United States by shifting the work to another company.

Has the Equal Employment Opportunity Commision (EEOC) been successful in carrying out its mission? Explain your answer.

Yes, because there is now more diversity in the workplace. With the EEOC, people of different color, gender, and age are protected by the Civil Rights Act of 1964.