Economics Unit 3 Review

Which of these is NOT a form of business organization?

• Sole Proprietorship

• Partnership

• Entrepreneur

• Corporation

Which type of business organization is considered to have ‘unlimited life’, meaning the organization can continue to exist, even if one or more of the owners die?

• Corporations

• Multinationals

• Nonprofit organizations

• Sole proprietorships

Which of the following is an advantage of a sole proprietorship?

• There are few requirements to start a sole proprietorship

• The owner makes all of the decisions

• The owner keeps all of the profits

• All of these

Which of the following is the best example of a limited partnership?

• Joe and Paul own the business – Joe is responsible for 60% of the liability

• Joe and Paul own the business – they are equally responsible for liability

• Joe owns the business, but pays Paul to run it

• Joe, Paul, and Mark all started the business, but a Board of Directors now runs it

Which of the following is the best example of a corporation?

• Joe and Paul own the business – Joe is responsible for 60% of the liability

• Joe and Paul own the business – they are equally responsible for the liability

• Joe owns the business, but pays Paul to run it

• Joe, Paul, and Mark all started the business, but a Board of Directors now runs it

Entrepreneurs are best described as people who

• Market a product

• Open their own business

• Rely on commissions for income

• Invest heavily in the stock market

The most common legal form of business in the United States is the

• Corporation

• Partnership

• Cooperative

• Sole proprietorship

One disadvantage of a sole proprietorship relative to a corporation is

• Higher productivity levels

• Unlimited financial resources

• Unlimited liability

• Ease of organization

Of all the profits made by US companies, corporations account for

• Less than 10%

• Between 10% and 20%

• Between 20% and 40%

• More than 40%

A corporations stockholders are not personally liable for debts of the corporation because

• A corporation is a considered a legal entity separate from its owners

• Too many stockholders to hold accountable

• Corporation owners have unlimited liability

• None of the above