Econ Unit 3 Test

What term is defined as an enterprise that produces goods or services, usually to make a profit?

• A business organization

• stock

• unlimited liability

• Vertical merger

What is the name for an individual who owns a share of a corporation and is entitled to part of its profits?

• director

• officer

• president

• stockholder

What is a dividend?

• the part of the corporation owned by a stockholder

• the part of the corporate profits paid to a stockholder

• the part of the corporation most available to stockholders

• the part of the corporate debt owed by the stockholders

What is the name for a contract in which a corporation promises to repay borrowed money, plus interest, on a fixed schedule?

• share

• dividend

• stock

• bond

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

• A bread bakery acquires a cookie company.

• A Chinese company acquires a U.S. company.

• A computer maker acquires a publisher.

• A shirt factory acquires a button manufacturer.

Angela opens a coffee shop, which she owns and where she sells a national brand of gourmet coffee. She pays licensing fees to do this. What kind of business it this?

• a franchise

• a cooperative

• a nonprofit

• a parternship

What is a disadvantage of having a franchise?

• A. selling an untested product

• receiving no business training

• sharing the profits with the franchiser

• having competing goals with the franchiser

What is a cooperative?

• an institution that acts like a business organization but which does not make a profit

• a business that licenses the right to sell its products in a particular area

• a business operated for the shared benefit of its owners, who are also its customers

• a semi-independent business that buys the right to run a franchise

What type of organization would be used by the American Dental Association?

• consumer cooperative

• service cooperative

• private company

• nonprofit organization

An inventor needs a huge amount of money to start a business but does not want to give up -control of how the product will be made. What business organization is he likely to choose?

• sole proprietorship

• general partnership

• limited partnership

• limited liability partnership