Economics Chapter 5

If a sole proprietor's expenses exceeded his income, what would be the result for the sole proprietor?

A. A loss

Which statement can be inferred from the excerpt?

A. Having college or graduate degrees has contributed to the wealth of many adults in Washington, D.C.

What does this kind of business organization have in common with a corporation?

A. It pays out some of its earnings to its owners.

Julia plans to become a sole proprietor who upholsters furniture in her home. Which statement about Julia's plan is true?

A. Julia will have to obtain a business license if required by law to do so.

The Civil Rights Act of 1964 prohibits employment discrimination based on race, color, religion, sex, or national origin. In combination with the graph shown, what additional information would help someone determine whether this law has had an effect on wage discrimination?

A. Median income data from 1964 for the groups shown in the graph, in constant 2009 dollars

Which of the following statements is accurate, based on this graph?

A. Nearly 90 percent of sole proprietorships earned less than $100,000 per year.

What incentive does a parent company have for providing training and support to a franchise owner?

A. Royalties might increase because a better-trained franchise owner will make more money.

Find the group that has the greatest percentage of workers earning hourly wages of $36 and over. Which of the following is the MOST LIKELY explanation for this group earning such high wages?

A. The demand for those workers is high, and the supply is low.

Which of the following is true about the structure of a corporation?

A. The stockholders elect the board of directors, who appoint a chief executive officer.

Which statement about the median weekly earnings of a worker with a doctoral degree is most accurate?

A. They are about twice the median weekly earnings of a worker with an associate's degree.

What is the MOST LIKELY cause of the peaks in the unemployment rate?

A. economic downturns

Replacing human capital with physical capital is a way for

A. employers to cut costs.

What is a KEY reason that an entrepreneur might choose to establish a corporation rather than a partnership or a sole proprietorship?

A. no personal liability

The graph shows a supply curve for restaurant cooks. Each cook works a 40-hour week. How many cooks will be supplied if a restaurant pays $16 per hour?

B. 8

Which of these businesses could be the partnership described in the bottom row of the table?

B. A dry-cleaning establishment is owned and operated by one man. His brothers have invested some money in the business but don't have any responsibilities for it.

Which of the following is a reason for employers to hire more temporary workers instead of permanent workers?

B. Employers can cut costs because temporary workers typically receive fewer benefits.

Which of the following counterarguments to the statement above is true?

B. Multinationals often provide jobs with low wages and poor working conditions in the countries in which they operate.

What government agency's regulations MOST LIKELY require this worker to wear protective gear?

B. Occupational Safety and Health Administration (OSHA)

Based on the excerpt from a news story, which statement is true?

B. The corporation is raising money by selling stocks.

Why would these workers MOST LIKELY earn a higher wage than a carpenter building a single-story elementary school?

B. The risk of being injured while working on this building is greater.

Which of the following characteristics do corporations share with many nonprofits?

B. They may use lobbyists to influence lawmakers.

What types of businesses is this passage describing?

B. cooperatives and nonprofits

Why might these people structure their business as a limited liability partnership rather than a limited partnership?

B. in order to limit personal responsibility if one of them is sued

The trends shown in this graph suggest that, in the year 2020,

B. jobs will be more readily available for workers in service-producing industries.

Shania and Nick own a convenience store together. They share equal responsibility and liability for their business, and each person receives 50 percent of the profits. What kind of business organization is it?

B. partnership

Which statement is TRUE for both mediation and arbitration?

C. A neutral third party listens to arguments from both sides.

What does the caption in this cartoon imply about some business organizations?

C. An unofficial barrier called a "glass ceiling" prevents women and minorities from advancing to higher levels of management.

Why can a labor strike, such as the one shown in the photo, be an effective tool for union workers trying to make a company accept its demands?

C. It can slow or stop production and, thus, profits, giving company owners an incentive to resolve the issue.

Based on the table, which of the following is an accurate statement about nonfarm sole proprietors in the industrial sectors shown?

C. Many construction workers and real estate agents earn a living as sole proprietors.

Which of the following government bureaus would MOST LIKELY be responsible for regulating wastes produced by the business in the photo?

C. Nuclear Regulatory Commission

Which of the following is a potential disadvantage for this sole proprietor?

C. a customer accuses him of a serving spoiled food and sues him, he is solely responsible for any debts or damages that are incurred.

What type of business organization does this table represent?

C. corporation

What were the main goals of the early labor movement in the United States?

C. higher wages, shorter hours, and a safer workplace

The key characteristic of a sole proprietorship represented in this photo is

C. the right of the business owner to set prices on the products.

Which group is counted in the labor force?

C. workers without jobs who are seeking employment

Which statement about median weekly earnings from 1980 through 2012 is supported by the graph?

D. For any given year, men's median weekly earnings were greater than women's.

Under what circumstances might stockholders be displeased with a corporation's performance?

D. If the company's stocks lose value on the stock exchange

Based on the excerpt from a news story, which statement best describes the merger of Ivers Paint and Kildare Paint Supply?

D. It is a vertical merger because the two companies are involved in different stages of the paint supply business.

What does the cartoon suggest about why a nonprofit might hire lobbyists to promote the interests of its organization?

D. Lobbyists generally have ready access to lawmakers.

What does "democratic control" LIKELY mean in this context?

D. Members make decisions by voting.

Why is the demand for labor called a derived demand?

D. The demand for labor is based on a demand for a product or service that workers can supply.

Look at the table of wages for selected occupational groups. Which of the following claims can be supported by data from the table?

D. Workers in the healthcare practitioners and technical group earn more on average than workers in the sales and related group.

Assuming all companies shown in the diagram sell office products, what is the best description of the merger illustrated by the diagram?

D. a series of horizontal mergers

Which type of business organization might offer low-interest loans to its members?

D. a service cooperative

Suppose a firm that makes appliances merges with a company that produces running shoes, and it later also buys a dairy. What is this combination called?

D. conglomerate