ENTREPRENEURSHIP EXAM REVIEW 1

In a general partnership,

• the business continues even if one partner dies
• partners must pay specific business taxes on stock they issue
• partners usually draw up legal papers called articles of partnership.
• partners are only liable for the business' debt up to the amount of their investment

An advantage of a corporation is that

• owners pay fewer taxes than owners of other forms of business.
• the business is subject to little government regulation.
• owners have limited liability for debt.
• owners have direct and immediate control over daily management of the business.

A market structure in which one firm has a monopoly because of its location is a 

• natural monopoly.
• geographic monopoly.
• technological monopoly.
• government monopoly.

Barry and two associates have been operating a business that is not going well. Barry is stressed out because the company is over $200,000 in debt and he knows that if it goes out of business, he and his two associates will have to pay it out of their own pockets. It sounds like Barry and his two associates have a 

• partnership.
• corporation.
• sole proprietorship.
• stock.

Susan, Phil, Robert, and Martina are all lawyers. After several years of working for big firms, they decide to pull their resources and start their own law practice together. The four of them will make all their business decisions together and will share all of the profits and financial risk. Their new law firm is a 

• partnership
• corporation
• sole proprietorship
• monopoly

Mr. Simpson is liable for all the debts of his company. Mr.Simpson has which type of business organization?

• sole proprietorship
• monopoly
• perfect competition
• corporation

Which type of business organization has the advantage of limited liability but the disadvantage of less control over business decisions?

• perfect competition
• partnership
• sole proprietorship
• corporation

The MOST LIKELY reason for an entrepreneur to start a new business is 

• to make a profit.
• to risk financial failure.
• to create a new social benefit.
• to discover a new product.

Bernice owns her own local gift shop. She acquired the necessary loans to open it, assumes all the financial risk herself, and makes all the decisions. It sounds like Bernice's business is a/an

• partnership
• franchise
• corporation
• sole proprietorship

Which is a characteristic of a successful entrepreneur?

• Motivated

• Takes very little risk

• Passionate

• Hard-working