economics test 3

Which type of business organization faces double taxation?

Corporations

an authorization from the local government to carry on an enterprise is called

a business license

Which of the following is NOT a common reason for a business combination? a A business wants to be larger. b A business wants to change its name. c A business wants to be more efficient. d A business wants to protect itself against the loss of suppliers.

a business wants to change its name

Which of the following is an example of a merger? a An individual buys a franchise. b A company combines with a company that supplies it with raw materials. c Two individuals form a partnership. d A company sells bonds to raise money.

a company combines with a company that supplies it with raw materials

Which of the following is a business organization owned by a group of people for their mutual benefit? a a limited liability partnership b a labor union c a professional organization d a cooperative

a cooperative

What is the major difference between a corporation and other kinds of businesses?

a corporation has a separate entity apart from that of the owners and workers

Why is it easier for a partnership to borrow money and to hold good employees than it is for a sole proprietorship to do so?

a partnership has more personal stability and access to more moeny

What is a fringe benefit?

a payment other than wages or salaries

What are royalties?

a percentage of a franchise's earnings paid to the parent company

Corporations raise large sums of money by a. selling bonds. Selected: b. selling stock in the company. This answer is incorrect. c. borrowing money. d. all of the answers.

all of the answers

If a general partnership fails, who is responsible for the debts?

all of the partners

Multinationals are different from other corporations in that they

are citizens of several nations at the same time

What are the money and other valuables that belong to a corporation or partnership called?

assets

A major disadvantage of the sole proprietorship is that a the business can be difficult to relocate. b the business cannot be sold if it does well. c banks are often unwilling to lend money to the business. d no one can work for the business owner.

banks are often unwilling to lend money to the business

a major disadvantage of sole proprietorship is that

banks are often unwilling to lend money to the business

Which type of business organization faces the most government regulation? a Cooperative b Corporation c Sole proprietorship d Partnerships

corporation

What is a major reason for conglomerate mergers? a unlimited life b Multinationals c Diversification d unlimited liability

diversifiation

A sole proprietor

does not have to pay a separate business tax.

Museums, public schools, and YMCAs are all a promoted by trade associations. b supported by professional organizations. c completely supported by the government. d exempt from paying income taxes.

exempt from paying income taxes

A business fails and the owners lose their investment in the company, along with their homes, automobiles, and other personal property. The owners are

general partners in a general partnership

An advantage of a merger between two companies is

improved production and efficiency

Which of the following is an advantage of a sole proprietorship? a It is the least-regulated form of business organization. b No one is responsible if it fails. c It is easy to get financing to start one. d It is an easy way to make a lot of money.

it is the least regulated form of business organization

What type of economic institution engages in collective bargaining? a Producer cooperatives. b Nonprofit organizations. c Labor unions d The Chamber of Commerce

labor unions

Which of the following is a disadvantage of a sole proprietorship? a lack of permanence b difficult to start up c high taxes d legal constraints

lack of permanance

One advantage enjoyed by a corporation is a limited liability. b limited life. c ease of obtaining a charter. d ease of management.

limited liability

All of the following are true of multinational corporations EXCEPT a multinationals are a type of business organization that has no weakness. b multinationals produce tax revenues for the host nation. c multinationals help spread technology throughout the world. d multinationals create new jobs where jobs are needed.

multinationals are a type of business organization that has no weakness

What are organizations that are in the business of benefiting society and operate like a business called? a nonprofit organizations b limited partnerships c trade associations d producer cooperatives

nonprofit orgainzation

The function of a retail or purchasing cooperative business or "Co-op" is to

obtain lower prices for its members

A common factor in all nonprofit businesses is that they

perform charitable acts

Which of the following characteristics does a nonprofit organization NOT have a Limited Liability b Ability to hire employees c Unlimited life d Fringe benefits e Profits

profits

Securities and Exchange Commission (SEC) supervises and regulates the

sale of corporate stock to the public

An example of a nonprofit organization is a a doctors office. b grocery store. c limited partnership. d school.

school

What does limited liability of the owners of stock in a corporation mean?

the stockholders of a corporation can lose only what they have invested in the corporation

In return for a fee to a franchiser, a business owner receives the right

to sell the franchiser's goods and services

Which of the following is NOT characteristic of the corporate form of organization? a board of directors b unlimited liability c proxy d stock e unlimited life

unlimited liability

All of the following are major advantages of a sole proprietorships EXCEPT a full control by the owner. b unlimited personal liability. c the possibility of fast, flexible decision making. d ease of starting the business.

unlimited personal liability

all of the following are major advantages of sole proprietorship except

unlimited personal liability

a joining of two or more businesses that are involved in different stages of producing the same good or service is called which of the following?

vertical merger