Micoreconomics Unit Test Review Questions

In which type of business organization is the owner personally responsible for all financial obligations?

• partnership

• sole proprietorship

• corporation

• limited liability company

Two tire companies control 75% of the tire market in the country. What type market structure?

• oligopoly

• monopolistic competition

• perfect competition

• monopoly

Which is MOST likely a disadvantage to a corporation?

• ability to sell stock

• limited liability of stock holders

• double taxation

• unlimited liability

Corporate stockholders are not responsible for the debts of corporation. This is MOST likely

• partnerships

• limited liability

• ability to raise capital

• establishment of price ceilings

Joe and Bob want to start a business together where they will share both the responsibilities and the profits.

• partnership

• sole proprietorship

• entrepreneurship

• corporation

Jim and Rhonda have money to invest. They are worried about liability. Which business form?

• proprietorship

• monopoly

• corporation

• partnership

Coke and Pepsi. Which market structure would this represent?

• monopoly

• pure competition

• monopolistic competition

• oligopoly

Two cobblers in town control the shoe making business. Which market structure?

• perfect (pure) competition

• oligopoly

• corporation

• partnership

What are some of the usual barriers to entry?

• Weak demand for product, low market price

• High unemployment, poorly skilled labor, resource shortages

• Licenses, patents, high start-up costs

• Lacking government regulation, plentiful supply of labor

Which would represent price competition strategy?

• Get the Most for Your Money!

• The Highest Quality on Earth!

• Forget the Rest, Stick with the Best!

• From Our Family to Yours!