Unit 2 Review

What is a Sole Proprietorship?

• Business owned by president

• Business owned by several companies

• Business owned by one person

• Business owned by a company

Sole proprietorship business owner has

• Restricted Liability

• No Liability

• Unlimited Liability

• Limited Liability

A group of people elected by the stockholders of a corporation to set the policies for the corporation is known as?

• Board of Directors

• Revenue

• Merger

A business which is owned by multiple shareholders is known as?

• Corporation

• Board of Directors

• Conglomerate

Unlimited liability means

• Business owner is not responsible for financial loss

• Business owner is responsible for all financial losses

• Business owner pays only half financial loss

• Business owner pays taxes

Which of these is an advantage of a sole proprietorship?

• It is recognized as a separate legal entity.

• It is easy to attract qualified employees.

• The owner does not have to share the profits of the business with anyone else.

• The proprietor does not have to pay income taxes for the business.

Which type of business offers the best chance for quick decision-making?

• Sole proprietorship

• General partnership

• Limited partnership

• Corporation

Which of the following statements correctly identifies a difference between perfect competition and monopolistic competition? 

• In perfect competition there are no barriers to entry, but there are strong barriers in monopolistic competition. 
• In perfect competition there are many firms, but in monopolistic competition there are only a few firms. 
• In perfect competition the firms all sell products that are exactly the same, but in monopolistic competition each firm sells a slightly differentiated product. 
• In perfect competition there are few consumers, but in monopolistic competition there are many consumers. 

In monopolistic competition producers....

• have a full ability to set prices

• have some ability to set prices

• have no ability to set prices

What type of products will firms produce in monopolistic competition?

• Firms produce significantly differentiated products

• Firms produce slightly differentiated products

• Firms produce homogenous products with one modification

• Firms produce a variety of different products