Econ Unit 3 Exam

What type of business organization is owned and managed by a single individual?

• General Partnership

• Limited Liability Partnership

• Closely held corporation

• Sole Proprietorship

Which type of business organization has the advantage of shared decision making and specialization?

• Closely held corporation

• Sole Proprietorship

• Limited Liability Partnership

• Publicly held corporation

What is the main advantage of a corporation in terms of liability for owners?

• Limited liability

• Unlimited liability

• Potential loss of control by the founders

• Double taxation

What type of merger involves two or more firms competing in the same market with the same good or service?

• Horizontal Merger

• Conglomerate

• Vertical Merger

• Multinational Corporation

What type of business organization grants the exclusive right to sell a certain product or service in a given area?

• Nonprofit Organization

• Professional Organization

• Franchise

• Cooperative

Differentiation is _________________.

• having identical products.

• copying another business.

• small differences that make your product unique.

• having control of the market value.

Fast food restaurants are an example of _______________.

• differentiation.

• monopolistic competition.

• pure / perfect competition.

• monopolies.

The 4 conditions for a purely / perfectly competitive market are:

• The products are identical.

• Buyers know a lot about the product.

• The sellers control the market price.

• Sellers can enter and exit the market easily.

• There are many buyers and sellers.

Oligopolies and monopolies are the same because ________.

• They both have many buyers and sellers.

• They both are the only sellers of their product.

• They both have identical products.

• They both have high barriers to entry.

The characteristics of a monopoly are:

• Free entry and exit.

• A restricted and regulated market.

• One seller and that business has control the prices on the particular good.

• A restricted and regulated market, and one seller and that business has control the prices on the particular good.