Economics ch 9

Which statement is true of all entrepreneurs?

• They take a risk.

• They earn a profit.

• They hire employees.

• They work short hours.

Which form of business organization is most common?

• partnership

• corporation

• business franchise

• sole proprietorship

To expand their business, sole proprietorships most often depend on money from

• selling stock.

• applying for grants.

• reinvesting their profits.

• soliciting charitable donations.

One advantage of a partnership over a sole proprietorship is that a partnership

• faces less regulation.

• avoids double taxation.

• can get credit more easily.

• has easier decision making.

The board of directors of a corporation is selected by and accountable to the

• stakeholders

• shareholders.

• founding entrepreneur

• chief executive officer

Which of these is a disadvantage of turning a partnership into a corporation?

• loss of control

• continuity issues

• expanded liability

• less management skill

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

• assets

• liabilities

• ownership

• liens

Corporations are defined as “entities” because they...

• have a legal identity separate from those of their owners.

• may merge in various ways.

• are not liable to their owners.

• sell about 90 percent of the products sold in the United States.

Liability is the

• necessity to do a lot of paper work.

• requirement to offer fringe benefits

• legal obligation to pay debts.

• opportunity of the sole proprietor to keep all profits after taxes.

A new business owner may choose to set up a sole proprietorship because he or she

• has to fulfill the least number of regulations.

• keeps all the profits.

• makes all of the decisions

• all of the above