Econ Test: Unit 3

The most important decisions in a corporation are made by the

• managers.

• stockholders.

• board of directors.

• founders of the company.

Which is NOT a type of partnership?

• limited

• cooperative

• general

• limited liability

Liability is the

• necessity to do a lot of paperwork.

• requirement to offer fringe benefits.

• legal obligation to pay debts.

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

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

• sell the franchiser's stocks and bonds.

• run the business in the way he or she wishes.

• form a partnership with the franchiser.

• sell the franchiser's goods and services.

One of the ways a corporation can raise money is by

• selling stock on the stock market.

• buying bonds from other corporations.

• demanding money from the government for research and development.

• giving shares to the founders.

Which type of business organization has shareholders?

• corporation

• sole proprietorship

• limited liability partnership

• general partnership

Which of the following is an example of a vertical merger?

• An individual buys a franchise.

• Two individuals form a partnership.

• One company combines with another company that supplies it with raw materials.

• Two grocery stores decide to combine their stores and resources.

Museums, public schools, and YMCAs are all

• exempt from paying income taxes.

• completely supported by the government.

• promoted by trade associations.

• supported by professional organizations.

Most large businesses are

• sole proprietorships.

• general partnerships.

• corporations.

• cooperatives.

The most common form of business organization is the

• corporation.

• sole proprietorship.

• general partnership.

• franchise.