WorksheetsMicroeconomics Part 2 Review
Total questions: 24
Worksheet time: 12mins
Rank the business organizations from HIGHEST to LOWEST degree of decision-making for a single owner.
Corporation -- Sole Proprietorship -- Partnership
Sole Proprietorship -- Corporation -- Partnership
Sole Proprietorship -- Partnership -- Corporation
Partnership -- Corporation -- Sole Proprietorship
In which type of business organization do the owners have the least input and decision-making on the day to day operations?
Monopoly
Corporation
Partnership
Sole Proprietorship
Corporations, as a separate legal entity, are subject to corporate taxes. Additionally, the stockholders in corporations are subjected to income taxes on the sale of stocks and income from dividends. This peculiar tax situation that corporations face is called
"flat tax."
"double taxation."
"itemized deductions."
"progressive income tax."
The fact that Pips Burrito company lives on well past the original entrepreneur best characterizes which feature of corporations?
Unlimited Life
Double Taxation
Limited Liability
Unlimited Liability
Which type of business organization has the advantage of specialization, but the disadvantage of unlimited liability?
oligopoly
corporation
S-Corporation
partnership
Which example illustrates an oligopoly market structure in early American history?
Two cobblers in town control the shoe making business.
All imports to the Thirteen Colonies came from England.
Merchants offered a variety of local products for sale.
Artisans exchanged finished goods for produce from farmers.
Sally and Wally have a great business idea. They have some money to invest and hope to find more people interested in investing. They are more worried about the legal aspects and the liability. The BEST business form for them is MOST LIKELY a
corporation.
monopoly.
partnership.
proprietorship.
Which statement BEST describes a benefit of natural monopolies, like utilities?
Utility companies can charge whatever price fits the market demand?
Natural monopolies can provide service in areas not served by other firms.
Natural monopolies, like utility companies, are designed to be profitable firms.
Utility companies, and other natural monopolies, are highly regulated by governments.
Jorge and Fred have a product they would like to sell. They decide to share the risks and profits by forming an unincorporated business. The business organization Jorge and Fred have MOST LIKELY formed is a(n)
partnership.
corporation.
entrepreneurship.
sole proprietorship.
Which of these is the best economic definition of "pure competition"?
the market is dominated by one seller
the market is dominated by a few buyers
the market is dominated by two or more sellers
the market is not dominated by either buyers or sellers
Why is there no competition in a monopoly?
There are no close substitutes.
There are too many substitutes.
Prices are set by the government.
The government forbids competition.
A perfectly competitive firm's marginal revenue
equals the market price of its product.
decreases as the firm produces more output.
increases as the firm produces more output.
is less than the market price of its product.
As long as it does not shut down, a perfectly competitive firm earns the maximum profit possible as long as it operates so that
market demand is inelastic.
its price exceeds its marginal revenue.
its price exceeds its average total cost.
its marginal revenue equals its marginal cost.
Heather is seeking to start a business. She is wanting to protect her assets and bring in other people to help her get started and hire people to run the business. What form of business organization should Heather set up?
kiosk
partnership
corporation
sole proprietorship
Heather is seeking to start a business. She is seeking to be in control of all aspects of the business. What is a potential risk of the business organization she should set up?
Heather would risk nothing.
Heather would lose her popularity.
Heather would risk losing partners.
Heather would be liable for all costs and damages.
Heather is seeking to start a business. She is concerned with having enough money to start the business, even after taking a loan from the bank. She is willing to take on partners but she still wants to have control over most aspects of the company. Which form of business organization would be best to set up?
franchise
corporation
partnership
sole proprietorship
Johnny has invested 10 shares in a big name electronics company. Each share is worth $150.28, and the company pays Johnny $2.13 for each share that he owns. With his 10 shares he earns $21.30 per share. What is this type of earning called?
capital gains
dividend income
interest income
adjusted gross income
Shelby and her sister Isa want to go into business together selling beauty products. They have agreed to share the risks and profits associated with their new business endeavor, what type of business ownership should they set up?
trust
partnership
corporation
proprietorship
Which BEST describes the decision-making process for a corporate business organization?
The shareholders run the day to day operations of the business, making all decisions.
The partners of the firm make decisions jointly, as laid out in the articles of partnership.
Shareholders elect the Board of Directors, who then hire the managing officers of the company, such as the CEO.
The CFO hires a board of governors to oversee the structure of the corporation, and mid-level managers to run the day to day operations.
Which market structure has the largest number of suppliers?
monopoly
oligopoly
perfect competition
monopolistic competition
Mr. Simpson is liable for all the debts of his company. Mr. Simpson has which type of business organization?
monopoly
corporation
congolomerate
sole proprietorship
Corporate stockholders are not responsible for the debts of the corporation. This is MOST LIKELY an example of
dividends.
partnerships.
limited liability.
unlimited liability.
An unincorporated business owned by a single person, which may or not have employees, is an example of a(n)
partnership.
corporation.
entrepreneurship.
sole proprietorship.
Worldwide, Coca-Cola and PepsiCola dominate the soft-drink market, selling significantly more beverage products than any other producers. This domination by only two producers is BEST described as a(n)
monopoly.
oligopoly.
open market.
pure competition.
