Chapter 8 Test "Types of Business Organizations"

Sole proprietors have ____________, a situation in which a business owner is responsible for all the losses, debts, and other claims against the business.

• unlimited liability

• limited liability

• legal immunity

• dividend

A _________ acts like business, but its purpose is to benefit society.

• Franchise

• Limited Liability Partnership

• Nonprofit organization

• corporation

A __________ takes place when firms involved in different steps of manufacturing or marketing come together.

• horizontal merger

• diagonal merger

• circular merger

• vertical merger

A __________ is a form of business organization recognized by law as a separate legal entity having all the rights of an individual. It has the right to buy and sell property, enter into legal contracts, and sue and be sued.

• corporation

• partnership

• conglomerate

• proprietorship

What is a cooperative?

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

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

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

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

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

• A shirt factory acquires a button manufacturer.

• A computer maker acquires a publisher.

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

• A bread bakery acquires a cookie company.

What is it called when companies that produce the same product merge?

• multinational corporation

• vertical merger

• conglomerate

• horizontal merger

What is a dividend?

• the part of the corporate debt owed by the stockholders

• the part of the corporation most available to stockholders

• the part of the corporate profits paid to a stockholder

• the part of the corporation owned by a stockholder

Which of the following is a corporation that issues stock that can be freely bought and sold?

• multinational corporation

• nonprofit corporation

• private corporation

• public corporation

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

• stockholder

• president

• officer

• director