Economics Unit 3

Sara’s Hair Palace is a small, locally owned beauty salon in Sterling. This represents what type of business?

• corporation
• partnership
• sole proprietorship

Dan has $5,000. He wants to invest his money in the type of business that has the least amount of liability. In which type of business should he invest?

• corporation
• partnership
• proprietorship

A business partnership has ___________ who share the risks and the profits.

• One owner
• No more than three owners
• Two or more owners
• Five or more owners

Which of the following is an advantage of sole proprietorships:

• Limited liability
• Unlimited financial power
• Dual taxation
• Quick decision making

Which of the following is a disadvantage of sole proprietorships:

• Limited capital
• Control 
• Privacy
• Tax liability

Which of the following is an advantage of general partnerships:

• Limited capital
• Unlimited liability
• Easy to end
• Combined capabilities

Which of the following is an advantage of the corporation as a form of business ownership:

• Less complex requirements
• Separate owners and managers
• Limited liability
• High Taxes

Two local business owners want to reduce competition, so they decide to form one organization from the two companies. This is an example of a

• monopoly.
• hostile takeover.
• merger.
• trading bloc.

Dominos Pizza + Magnolia Flour Company

• Vertical

• Horizontal

• Conglomerate

• Multinational

Target + Walmart

• Vertical

• Horizontal

• Conglomerate