Lesson 2.1 - Notes Page 1

Multiple Choice

Which of the following best describes the flow of money and resources in the circular flow model?

• Households provide goods and services to firms, and firms provide income to households.

• Firms provide goods and services to households, and households provide factors of production to firms.

• Households provide revenue to firms, and firms provide spending to households.

• Firms provide factors of production to households, and households provide income to firms.

Multiple Choice

Which characteristics should be included when comparing sole proprietorships, partnerships, and corporations?

• Number of owners, liability, lifespan, decision making, taxation

• Location, size, industry, marketing, competition

• Profit margin, employee benefits, customer base, advertising

• Technology, innovation, sustainability, global reach

Multiple Select

What is a Sole Proprietorship?

• Business owned by president

• Business owned by several companies

• Business owned by one person

• Business owned by a company

Multiple Choice

What is one reason sole proprietorships are the most numerous type of business organization?

• It is the easiest business to form

• it requires no physical capital

• it is run by multiple owners

• it only produces shoes

Multiple Choice

Which of the following is NOT an advantage of a sole proprietorship?

• Low start-up cost

• Easy management

• Owner keeps all profits

• Limited liability