Economics Chapter 8 Review

The easiest type of business to start is a sole proprietorship.

True

operates like a business but doesn't seek financial gain

nonprofit organization

Schools, churches, and community organizations are examples of ______ .

nonprofit organizations

In a retail business, the stock held in reserve is called

Inventory

Which of the following is true about nonprofit organizations?

They work in a businesslike way to promote member interests.

Corporations have most of the rights of an individual, according to the law.

True

a form of corporate ownership giving one vote per share for stockholders

common stock

A person who wishes to incorporate a business needs to ______ .

file for permission with the government

To get a picture of a business's overall expenses and profits, you should look at its ______ .

income statement

report showing a business's sales, expenses, net income and cash flow

income statement

situation in which a firm legally ceases to exist when an owner dies or quits, or when a new owner is added

limited life

10. lender of investment funds to a start-up business in exchange for partial ownership of the business

venture capatalist

What is the main purpose of incubators?

providing entrepreneurs with training to be successful

total amount of new after-tax income generated from business operations

cash flow

Which of the following is a noncash charge?

depreciation

If a corporation goes out of business, common stockholders get their investment back before preferred stockholders do.

False

Partnerships are the most numerous form of business organization in the United States.

False

When two companies that produce the same kind of product merge, this is called a ______ .

horizontal merger

combination of firms producing the same kind of product

horizontal merger

funds left over after expenses

net income

The government document that grants permission to establish a corporation is called a

Charter

Unlimited liability is one of the main advantages of a sole proprietorship.

False

Which of the following is true of both nonprofit organizations and for-profit corporations?

They both use scarce factors of production.

Which of the following is an advantage of a multinational?

They produce tax revenue for the countries where they do business.

Which of the following phrases best defines the term limited partnership?

a partnership in which at least one partner has less responsibility in the business operations and less liability for business losses

Which of the following is an advantage of sole proprietorship?

all of the above

promotes the welfare of its business members

chamber of commerce

When a union negotiates pay and other job-related matters, this is called ______ .

collective bargaining

A company with four or more businesses that make unrelated products is called a ______ .

conglomerate

An organization that buys bulk amounts of goods to distribute to members is a ______ .

consumer cooperative

performs economic activity for the benefit of its members

cooperative

accepts deposits, makes loans, and provides other financial services

credit union

nonprofit service cooperative that accepts deposits, makes loans, and provides other financial services

credit union

using social networking to appeal to potential investors

crowd funding

If the activities of a nonprofit organization produce revenues, the organization uses the money to ______ .

further its work

all partners are equally responsible for management and debts

general partnership

A venture capitalist's main goal is usually to ______ .

get a good return on investments

place where entrepreneurs can receive the training to build a successful start-up business

incubator

organization that works for its members' interests concerning pay, working hours, health coverage, fringe benefits, and other job-related matters

labor union

represents workers' interests in various employment matters.

labor union

form of stock without vote, in which stockholders get their investments back before common stockholders do

preferred stock

A nonprofit organization that provides services to its members is called a ______ .

service co op

A credit union is an example of a ______ .

service cooperative

Most mergers take place to improve a company's performance in the eyes of ______ .

shareholders

A business run by a single person is a

sole proprietorship.

Limited life applies to ______ .

sole proprietorships

A document certifying ownership of part of a corporation is a

stock certificate

A business's net income is defined as ______ .

total income after relationships

combination of firms involved in different steps in manufacturing or marketing

vertical merger