Unit 3 Economics Review

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

• True

• False

A big advantage of sole proprietorships and partnerships is that business earnings are taxed only once—as income to the business owners.

• True

• False

The simplest form of business organization is the partnership, which is a firm owned and run by a single individual.

• True

• False

A corporation is a legal entity with an existence that is distinct from the people who organize, own, and run it.

• True

• False

At the equilibrium wage, there is neither an excess quantity supplied of the labor resource nor an excess quantity demanded.

• True

• False

Some jobs pay more because they require a long and expensive training period.

• True

• False

Unions try to increase wages of their members by reducing the supply of labor and increasing the demand for union labor.

• True

• False

The minimum wage law establishes the smallest amount that an employer can pay a worker for an hour of labor.

• True

• False

Simply put, more education and more job experience increase labor productivity, and more productive workers earn more.

• True

• False

The purpose of a strike is to

• force union members back to work.

• force the employer to accept the union’s position.

• force the employer to settle out of court.

• stop the employer from hiring replacement workers.