Economics Chapter Seven Review

What disadvantage of a proprietorship does the partnership form of business ownership solve?

Because a partnership offers greater sources of financing, it overcomes the proprietor's disadvantage of limited finical resources.

Explain the biblical principal J.C. Penney applied in the foundation of his company.

Do unto other as you wish they do unto you.

What are the key differences between a general partnership and a limited partnership?

In a general partnership, all partners have unlimited personal financial liability and equal say in running the company. In a limited partnership, at least one of the partners is the limited partner, whose personal financial liability is limited to only the amount he invested in the business and who has no management responsibilities to make business decisions.

An LLC combines the benefits of which two forms of business ownership?

It combines the benefits of a partnership and a corporation.

What are the three basic forms of business organization, and which is the most common in the US?

Sole proprietorship, partnership, corporation, and Sole proprietorship is the most common.

What is the advantage of being incorporated?

The primary advantage of incorporation is limited finical liability.

What are the two biblical principals on partnerships discussed in the text?

2 biblical principles warning against unequal yoking and becoming surety.