Unit 3 Entrepreneurs, Business Organizations, and Labor Review

What is the role of entrepreneurs in the market economy?

Entrepreneurs contribute to economic growth and market dynamism by:

• Increasing government regulations

• Creating jobs and fostering innovation

• Reducing competition in markets

• Discouraging investment

The risks and rewards associated with entrepreneurial ventures include:

• High financial gain and potential for failure

• Guaranteed success and no risks

• No financial investment required

• No impact on personal life

Entrepreneurs invest their own funds and often seek additional financial capital.

• True

• False

By assuming risks, entrepreneurs invite competition and frequently inspire others to enter similar markets.

• True

• False

Unlike other businesspeople who may manage or innovate within a firm, entrepreneurs risk their personal finances and bear the full potential losses.

• True

• False

Employees or managers paid to be innovative do not assume the same level of personal financial risk as entrepreneurs.

• True

• False

A sole proprietorship is a business owned and run by ________.

• one individual

• a group of investors

• the government

• a corporation

What is a key characteristic of a sole proprietorship regarding control?

• The owner makes all decisions and keeps all profits.

• Decisions are made by a board of directors.

• Profits are shared equally among all employees.

• Control is divided between two or more partners.

What is the definition of a General Partnership?

• Two or more individuals share ownership and the responsibilities of running the business.

• A business owned and operated by a single individual.

• A company whose shares are traded publicly on the stock exchange.

• A business structure that provides limited liability to its owners.