ME IA1 Prep - Fall 21

By definition, a small business

• has only one location.

• has only one employee.

• must have at least three employees.

• has fewer than 500 employees.

If you have identified a risk, you have

• figured out how to eliminate it.

• recognized that it exists.

• publicly announced it is a problem.

• decided not to reveal it.

In partnerships, when should partners determine how profits will be divided?

• Once the business is profitable

• When they consult an attorney

• After the first year in business

• When setting up the business

Making sure that your business has something special and distinct to offer is known as

• Differentiation

• Diffusion

• Distinction

• Distancing

What is the role of shareholders in a corporation?

• To invest money in the business

• To directly oversee daily operations

• To hire and fire employees

• All of the above

When might adding an additional employee be bad for a small business?

• If the demand for the product or services goes down

• If the demand for the product or service goes up suddenly

• If clients prefer the new employee to the owner

• If the business has just hired a new person

Which of the following describes a nonemployee business?

• an architect who has only a part-time assistant

• a small ice cream shop where only one person works at a time

• a person who works from home for a larger company

• a manicurist who works from her home or at clients’ houses

Which of the following types of business does not require an attorney to set up?

• Sole proprietorship

• Partnership

• Corporation

• LLC

Why might a small business do better than a large business in a difficult economy?

• The small business will likely have more money to see it through difficult times.

• A small business serves its local community rather than a national market.

• A small business will have a more professional management and staff.

• There are no circumstances in which a small business would fare better than a large one.

All the following are reasons a person might choose to work from home EXCEPT

• The desire for more flexible hours

• The opportunity to socialize with coworkers

• The fact that long commutes can be avoided

• The desire to have a better work/life balance