ECON Chapter 5 Review

An entrepreneur goes into business to earn a profit while avoiding risk.

• True
• False

Though entrepreneurs may earn profit in the short run, it is profit in the long run that attracts competitors and substitutes.

• True
• False

Most entrepreneurs succeed by selling their good ideas to others.

• True
• False

If a corporation fails, stockholders could lose the amount they paid for the stock and could be held liable for the debts of the business.

• True
• False

Most sole proprietorships have many employees, creating management difficulties.

• True
• False

Each dollar of corporate earnings gets taxed twice.

• True
• False

The most influential & complex form of business organization is the corporation.

• True
• False

Entrepreneurs must introduce a new product to be successful.

• True
• False

The board of directors of a corporation is responsible for day-to-day decisions, such as hiring workers and setting production schedules.

• True
• False

A big advantage of sole proprietorships & partnerships is that business earnings are taxed only once- as income to the business owner.

• True
• False