ME: PQ:9-25

If a business owner is entitled to all profits and responsible for all debts, losses, and liabilities, what type of business organization do they have?

• Corporation

• Partnership

• Sole proprietorship

• Cooperative

What is a major difference between a corporation and a sole proprietorship?

• Corporations are not taxed.

• Corporations are separate legal entities from their owners.

• Sole proprietorships require more extensive record-keeping.

• Sole proprietors have limited liability.

Read the following sentence from the section "Corporation." Corporations can be a good choice for medium- or higher-risk businesses, businesses that need to raise money, and businesses that plan to "go public" or eventually be sold. Which sentence from the article on types of Businesses BEST supports this idea?

• In some cases, corporate profits are taxed twice — first, when the company makes a profit, and again when dividends are paid to shareholders on their personal tax returns.

• Shareholders are individuals or institutions that legally own one or more shares of stock in a corporation.

• If a shareholder leaves the company or sells his or her shares, the corporation can continue doing business relatively undisturbed.

• Corporations have an advantage when it comes to raising capital because they can raise funds through the sale of stock, which can also be a benefit in attracting employees.

Which type of partnership protects each partner from debts against the partnership and from being responsible for the actions of other partners?

• General partnership

• Limited partnership

• Limited liability partnership (LLP)

• Sole proprietorship

How did John Pierpont Morgan influence the railroad industry in the late 1800s?

• He helped stabilize the industry by reorganizing companies and combining lines into larger systems.

• He invented the steam locomotive.

• He built the first transcontinental railroad.

• He opposed the use of investment bankers in railroad financing.

What happens to a corporation if a shareholder sells his or her shares?

• The corporation continues doing business relatively undisturbed.

• The corporation must dissolve immediately.

• The corporation loses all its assets.

• The corporation merges with another company.

Why did railroad executives turn to investment bankers in the late 1800s?

• Building railroads was expensive and required large amounts of capital.

• They wanted to avoid government regulation.

• They needed help designing new locomotives.

• They wanted to expand into the steel industry.

Which of the following best describes the process known as "Morganization"?

• Reorganizing and combining separate railroad lines into larger, centrally controlled systems

• Building new railroads in the western United States

• Replacing iron rails with steel rails

• Introducing telephones to railroad stations

What is vertical integration, as practiced by Carnegie’s steel plants?

• Buying only finished products from other companies

• Controlling all steps of production from raw materials to finished goods

• Selling products directly to consumers

• Focusing only on marketing and sales

What major change did John D. Rockefeller bring to the petroleum industry?

• He invented the automobile

• He focused on producing gasoline for cars

• He revolutionized petroleum refining and created a monopoly

• He only sold oil to foreign countries