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Economics Unit 2

Total questions: 80

Worksheet time: 49mins

Name
Class
Date
1.
This type of business is considered a separate legal entity in the eyes of the law.  It is owned by shareholders.
a)
Cooperative
b)
Company
c)
Partnership
d)
Sole Proprietorship
2.
Which of the following is not an advantage of a sole proprietorship?
a)
Easy to start
b)
Owner is their own boss
c)
Owner has unlimited liability
d)
Owner receives all the profits
3.
One advantage of a partnership is that there are more sources of capital available than in a sole proprietorship.
a)
True
b)
False
4.
-General Partner provides business skill/talent
-Silent Partner provides capital
-Silent Partner enjoys limited input
a)
Partnership
b)
Limited Liability Company
c)
Sole Trader
d)
Joint Venture
5.
-Owned by a single owner
-No separation between owner and business
-Unlimited personal liability
a)
Corporation
b)
Limited Liability Company
c)
Partnership
d)
Sole Proprietorship
6.
-Publicly traded company
-Governed by Board of Directors
-CEO, COO, CFO
-Stocks sold to raise capital
a)
Corporation
b)
Limited Liability Company
c)
Partnership
d)
Cooperative
7.
-Two or more owners
-Unlimited Personal Liability
-No separation between owners and business
a)
Limited Partnership
b)
Corporation
c)
Cooperative
d)
Partnership
8.
-Subject to high start-up and royalty fees
-Must adhere to corporate standards
-Privately owned locations but associated with a larger, more recognizable brand
a)
Franchise
b)
Limited Partnership
c)
Corporation
d)
Joint Venture
9.
In a Limited Partnership, the limited partner is also known as the:
a)
Financier 
b)
Monopolist
c)
Venture Capitalist
d)
Silent Partner
10.

_______________is a legal term for being held accountable

a)

Liability

b)

Assets

c)

Bankruptcy

d)

Claim

11.

Disadvantages for this type of business include: owner pays for everything, hard to get money to start from the bank, owner might lack skills & unlimited liability.

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

d)

Limited liability company

12.

Advantages of this business include: easier to get money from the bank to start, share skills and share risks.

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

d)

Limited liability company

13.
A disadvantage of a sole proprietorship is unlimited liability for business debts.
a)
TRUE
b)
FALSE
14.
This type of business is owned by many people called stockholders.
a)
Sole Proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
15.

a business combination merging four or more businesses that produce unrelated products of services

a)

merger

b)

horizontal merger

c)

conglomerate

d)

multinational corporation

16.

A ____ combines firms that operate at different stages in the production of a good.

a)

conglomerate

b)

vertical merger

c)

horizontal merger

d)

cooperative

17.

A legal entity formed to carry out a "non-for-profit" mission is a

a)

cooperative

b)

nonprofit organization

c)

conglomerate

d)

franchise

18.

The biggest advantage of a "corporation" business structure is

a)

expensive startup costs

b)

low monetary rewards

c)

different tax treatment

d)

limited liability for the stockholders

19.

What business structure is the easiest to start?

a)

partnership

b)

sole proprietorship

c)

partnership

d)

corporation

20.

Which business structure divides the responsibility and liability between 2 or more people? Like a law office, dentist, etc.

a)

Sole Proprietorship

b)

corporation

c)

partnership

d)

franchise

21.

Which of these business structures is most likely to last a longer time and survive a major change in leadership?

a)

partnership

b)

corporation

c)

franchise

d)

sole propietorship

22.

Which market structure has only one seller and they control the overall market and options for consumers.

a)

monopoly

b)

perfect competition

c)

the purge

d)

oligopoly

23.

Which of these markets usually offers the lowest prices for consumers?

a)

oligopoly

b)

monopoly

c)

command economy

d)

perfect competition

24.

The Sherman Anti-trust Act is an example of a law that allows the US Government to interfere and try to prevent this unfair market structure...

a)

Open markets

b)

perfect competitions

c)

monopolies

d)

utopian

25.
What is a common problem in a partnership?
a)
Disagreements never occur between partners.
b)
Each partner is personally liable for business debts
c)
Partners often have same goals for the business.
d)
Trust between the partners is solid.
26.
Why is failure a common fate for sole proprietorships?
a)
The startup costs are often too high for the owner to maintain.
b)
There are multiple people responsible for the entire business. 
c)
The proprietor is not allowed to hire anyone thus has to bear the burden of work alone.
d)
The stress put on a sole proprietor often causes them to quit.
27.
Which of the following is a disadvantage of a sole proprietorship?
a)
Business expansion decisions are easy to accomplish.
b)
It may be difficult to raise enough capital to begin business.
c)
Sole proprietors are their own bosses.
d)
The proprietor owns the assets and runs the business.
28.
What is the simplest form of business organization?
a)
limited ownership
b)
corporation
c)
partnership
d)
sole proprietorship
29.
Why are sole proprietorships so common?
a)
They require no registration and can be as simple as one person selling a product.
b)
They have very low start-up costs, including a small registration fee.
c)
They value individualism over cooperation and group dynamics.
d)
The government has encouraged people in the past 50 years to start their own businesses.
30.
How can death be a disadvantage to a sole proprietorship?
a)
The business will have to cover the costs of the funeral.
b)
Death of the proprietor often ends the business.
c)
Death has no real disadvantage to any succeeding sole proprietorship.
d)
The business is liable for the death of the business owner. 
31.
What is double-taxation?
a)
Being taxed double the income tax of a partnership
b)
Tax on a business plus its shareholders' income
c)
Tax people have to pay for existence of corporations
32.
What must be obtained from a state government prior to creating a corporation?
a)
Stock certificate
b)
Proxy
c)
Charter
d)
Capital funds
33.
The board of directors decides on the company's policies and selects officers such as CEO, CFO, Treasurer, and etc. 
a)
True
b)
False
34.
The Income Statement lists a businesses:
a)
Assets and Expenses
b)
Owner's Equity and Revenue
c)
Revenue, cost of goods and Expenses
d)
Expenses and Net Assets
35.
Net Profit is:
a)
Assets less Liabilities
b)
Gross Profit less Expenses
c)
Revenue less Liabilities
d)
Liabilities less Assets
36.
Net Income:
a)
Decreases equity
b)
Represents the amount of assets stockholders put into a business
c)
Equals assets minus liabilities
d)
Is the excess of revenues over expenses
37.
lists and summarizes income and expense transactions that have taken place over a specific period of time, usually a month or a year
a)
mortgage
b)
income and expense statement
c)
net income
d)
savings
38.

In a cash flow statement depreciation is deducted from profit because it is a non cash expense

a)

False

b)

True

39.

A cash flow is useful for

a)

Informing the business about its profits

b)

Helping the business see where cash shortages may occur

c)

Seeing the flow of cash from the business to the bank

d)

Choosing the best method of finance to expand the business

40.

Dominos Pizza + Magnolia Flour Company

a)

Vertical

b)

Horizontal

c)

Conglomerate

d)

Multinational

41.

Shell & BP

a)

Horizontal

b)

Vertical

c)

Conglomerate

d)

Multinational

42.

Target + Walmart

a)

Vertical

b)

Horizontal

c)

Conglomerate

43.

US Steel + Ford Motor Company

a)

Vertical

b)

Horizontal

c)

Conglomerate

d)

Multinational

44.

Microsoft + Samsung

a)

Vertical

b)

Horizontal

c)

Conglomerate

d)

Multinational

45.
Occurs when a firm acquires former suppliers or customers
a)
Horizontal Merger
b)
Vertical Merger
c)
Product Extension Merger
d)
Market Extension Merger
46.

What is the business consolidation that occurs between firms that operate in the same industry?

a)

Non-profit Organization

b)

Conglomerates

c)

Horizontal Merger

d)

Vertical Mergers

47.

When companies _________, they join together and form a new, unified company.

a)

merge

b)

outsource

c)

invest

48.

A ______________ is a type of business formed for the purpose of some positive or altruistic task or outcome.

a)

corporation

b)

sole partnership

c)

non-profit

49.

A multinational corporation only has one facility.

a)

TRUE

b)

FALSE

50.

An example of a multinational corporation is...

a)

McDonald's

b)

Pal's

c)

JC Penny

d)

Dollar General

51.

What is a multinational corporation?

a)

corporations that operate in more than country but are based in one country

b)

corporations that operate in one country only

c)

corporations that have global income of more than $1 billion

d)

corporations that only operate in countries outside of the country they are based in

52.

This describes the combining of companies involved in different steps of the production process.

a)

vertical merger

b)

horizontal merger

c)

reserved merger

d)

general merger

53.

This describes the joining of companies that offer the same or similar products or services.

a)

vertical merger

b)

horizontal merger

c)

reserved merger

d)

general merger

54.
Goodwill Industries help poor and homeless people with the money raised by selling donated products in their stores.  How is Goodwill classified?
a)
combination product and service
b)
For-profit
c)
Non-profit
d)
Service
55.
How many firms are there in a perfect competition?
a)
1
b)
2-5
c)
Many
56.

True or False: A perfect competition assumes that all firms sell the identical product

a)
True
b)
False
57.
Why does no one firm dominate in a perfect competition?
a)
No firm wants to
b)
Each firm sells to different people
c)
Each firm produces so little of the total supply that they cannot influence prices
d)
One firm will eventually dominate and make it a monopoly
58.
True or false: Sellers are able to enter and exit the market freely in a perfect competition,
a)
True
b)
False
59.
Factors that make it difficult for new firms to enter a market are called
a)
Barriers to entry
b)
Factors of production
c)
Limited supply
d)
Monopolistic Outlook
60.
How many firms are there in a monopoly?
a)
1
b)
2-5
c)
Many
61.
What prevents firms from entering a monopoly?
a)
Barriers
b)
Technology
c)
Price
d)
The government
62.
True or false: There is a variety of goods present in a monopoly.
a)
True
b)
False
63.

Define Perfect Competition

a)

any factor that makes it difficult for a new firm to enter a market

b)

a product that is the same no matter who produces it

c)

a market structure that in which a large number of firms all produce the same product

d)

market structure that does not meet the conditions of perfect competition

64.

Define Commodity

a)

a product that is the same no matter who produces it

b)

any factor that makes it difficult for a new firm to enter a market

c)

the expenses a firm must pay before it can begin to produce and sell goods

d)

market structure that does not meet the conditions of perfect competition

65.

Which of the following is one of the four conditions for perfect competition?

a)

Buyers and sellers are well informed about products

b)

Many buyers and sellers participate in the market

c)

Both A and B

d)

None of the Above

66.

What are Identical Products?

a)

Any factor that makes it difficult for a new firm to enter a market

b)

A market structure that does not meet the conditions of perfect competition

c)

Products that are different in every way

d)

No differences between the products sold by different suppliers

67.

How do produces create informed buyers?

a)

Products that are different in every way

b)

Any factor that makes it difficult for a new firm to enter a market

c)

The market provides the buyer with full information about the product’s features and price

d)

No differences between the products sold by different suppliers

68.
The airline industry is most likely in the market structure called
a)
perfect competition
b)
oligopoly
c)
monopolistic competition
d)
monopoly
69.
Price fixing and collusion often occur in this type of market structure
a)
monopoly
b)
oligipoly
c)
perfect competition
d)
monopolistic competition
70.
In this market structure there are many buyers and sellers with identical products
a)
perfect competition
b)
monopolistic competition
c)
monopoly
d)
oligopoly
71.
Many companies selling very similar, but not identical products is known as:
a)
Monopoly
b)
Oligopoly
c)
Monopolistic Competition
d)
Pure Competition 
72.
The monopoly market structure is the opposite of the perfect competition market structure.
a)
True
b)
False
73.
The market structure with the most control over prices and as a result, the highest prices is:
a)
Monopoly
b)
Monopolistic Competition
c)
Perfect Competition
d)
Oligopoly 
74.
This market structure can act like a monopoly when the firms all set prices the same
a)
Monopoly
b)
Monopolistic Competition
c)
Perfect Competitio
d)
Oligopoly 
75.
AT&T, Verizon, and T-Mobile are an example of a(n)
a)
Monopoly
b)
Oligopoly
76.
When companies that form on oligopoly cooperate together to set or fix prices at a given level, they are engaging in
a)
Monopoly
b)
Vertical Integration
c)
Collusion
d)
Rationing
77.
Point at which supply and demand come together
a)
price ceiling
b)
excess demand
c)
equilibrium
d)
disequilibrium
78.
In which market structure is there the MOST competition?
a)
Monopoly
b)
Oligopoly
c)
Monopolistic Competition
d)
Perfect Competition
79.
The post office or fire department is an example of a _______________ monopoly.
a)
Technological
b)
Government
c)
Geographic
d)
Natural
80.
Which type of market structures has very few producers(companies) that control the majority of the market?
Hint: think of the soda market
a)
perfect competition
b)
monopolistic competition
c)
oligopoly
d)
monopoly

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