True or False? The following are advantages to a sole proprietorship:

·      Easy to start and end (obtain simple business license)

·      Little legal paperwork

·      Least expensive to start

·      Work for yourself

·      Relatively few regulations (least regulated structure)

·      Sole receiver of profits

·      Full control (owner directs and controls all decisions)

(a)  

True or False? The following are examples of the economic rights and responsibilities in starting a small business?

- Business license and site permit

- Adhere to zoning laws

- Few regulations

- Must pay taxes

- Owner can buy property, sell products, and set prices

(a)  

True or False? A partnership is a business organization by 4 or more persons who agree on specific division of responsibilities and profits.

(a)  

True or False? Profits and losses pass through the business to the partners, who are taxed on their own personal income tax returns.

(a)  

True or False? Limited partners get to share in the profits and losses by directly participating in the business itself.

(a)  

True or False? Disadvantages of a partnership include:

·      Each partner is individually liable for the debts and obligations of the business

·      A partner cannot transfer interest in the business without the unanimous consent of the partners

·      Danger of dissolution if one partner wants to withdraw from the business or dies

·      If the limited partner becomes active in the business, he may have general-partner personal liability

·      Disagreements

·      Give up power to make decisions

(a)  

True or False? The following are disadvantages to a business franchise:

·      High franchising fees

·      Strict operating standards

·      Purchasing restrictions

·      Limited product line

(a)  

True or False? The following are characteristics of a corporation:

·      Is the most complex business organization

·      Is a legal entity, or being, owned by individual shareholders

·      Shareholders own bonds

·      Two types; closely held and publicly held

(a)  

True to False? The following are disadvantages to a corporation:

·      Difficult and expensive to start

·      Double taxation

·      Loss of control

·      More regulation

(a)  

True or False? U.S. Occupational trends:

·      U.S. started as a framing nation in the 1800s

·      Became industrial/manufacturing powerhouse in the early 1900’s

·      1950’s electronics boom (another surge in factory jobs)

·      1970’s personal computer revolution

·      In the past 100 years, the U.S. shifted from a manufacturing economy to a service economy (producing fewer goods and more services)

·      Increase in outsourcing and offshoring

·      Global, interconnected economy

(a)  

True or False?

The greater one's education and skillset, the greater the pay

(a)  

True or False? Trends in wages & benefits to U.S. workers:

·      1950’s, a typical American worker was a white man who had graduated from high school and had found a secure 40-hour-a-week job where he hoped to stay until age 65

·      Today, more woman and minority groups are part of the workforce

·      Most people can expect to have 4-5 different jobs in their lifetime

·      Must have a college degree – to get jobs, people must have human capital; the education, training, and experience that make them useful in the workplace

·      A high school diploma is not enough

(a)  

A (a)   is a business owned and managed by a single individual. In this type of business structure, the lone entrepreneur earns all the profits and is responsible for all the debts. This is the most popular type of company in the U.S. (more than 70%).

A (a)   is an authorization from the local government to operate a business.

Cities and towns often designate certain areas, or zones, for residential use and for business. (a)   may prohibit sole proprietors from operating a business out of their homes.

(a)   is the legal obligation to pay debts.

(a)   are payments to employees other than wages or salaries, such as paid vacation, retirement pay, and health insurance.

(a)   is a business organization owned by two or more persons who agree on a specific division of responsibilities and profits. Partnerships are a good choice if owners are willing to share both the responsibility of running a business and economic right to enjoy the profits it earns.

(a)   is the most common type of partnership. In this type, all parties share equally in both responsibility and liability. At least 2 general partners and no limited partners. All partners have full responsibility and liability.

In a (a)   , only one partner is required to be a general partner. That is, only one partner has unlimited personal liability for the firm’s actions. The remaining partner or partners contribute only money. If the business fails, they only lose the amount of their initial investment. At least 1 general partner runs the business. At least 1 limited partner with limited liability.

In a (a)   , all partners are limited partners. An LLP functions like a general partnership, except all the partners have limited personal liability in certain situations, such as another partner’s mistakes. Typically, professionals like attorneys, physicians, and accountants register as LLPs. No general partners. All partners have limited personal liability in certain situations.

(a)   , or partnership agreement, is a legal document outlining each partner’s economic rights and responsibilities.

In a partnership, more than one person contributes (a)   , or money and other valuables.

A (a)   is a semi-independent business that pays fees to a parent company. In return, the business is granted the exclusive right to sell a certain product or service in each area.

Franchisers often charge high fees for the right to use the company name. They also charge franchise owners a share of their earnings, or (a)   .

A (a)   is a legal entity, or being, owned by individual stockholders, each of whom has limited liability for the firm’s debts.

Stockholders own (a)   , a certificate of ownership in a corporation. Each person who owns stock is a part-owner of the company issuing it.

(a)   issue stock to only a few people, often family members. These stockholders rarely trade their stock, but instead pass it on.

A (a)   has many shareholders who can buy or sell stock on the open market. Stocks are bought and sold in financial markets called stock exchanges.

A (a)   is a formal contract issued by a corporation or other entity that includes the promise to repay borrowed money with interest at fixed intervals.

When corporations determine their profits, they often choose to pay a share of those profits to stockholders in payments called (a)   .

(a)   have the advantage of limited liability for owners, which all corporations enjoy. They also have tax advantages because the firm does not pay corporate income tax.

In a (a)   , two or more firms competing in the same market with the same good or service join together.  

In a (a)   two or more firms involved in different stages of producing the same good or service join together.

Sometimes firms buy other companies that produce unrelated goods or services. When three or more unrelated businesses are involved, this combination is called a (a)   .

(a)   is defined as all nonmilitary people who are employed or unemployed.

(a)   is a business practice in which a company hires a third-party to perform tasks, handle operations or provide services for the company.

The movement of some of a company’s operations, or resources of production, to another country is known as (a)   .

(a)   is the theory that education increases efficiency of production and thus results in higher wages.

(a)   is the theory completing college signals to employers that a job applicant is intelligent and hardworking.

Demand for labor is called (a)   , because it is derived, or set, by the demand for another good or service (i.e., demand for cooks goes up when the market demands more restaurants).

(a)   is the quantity of output produced by a unit of labor.

(a)   is the wage rate, or price of labor services, that is set when the supply of workers meets the demand for workers in the labor market.

(a)   requires no specialized skills, education, or training. Workers in these jobs usually earn an hourly wage. They would include dishwashers, messengers, janitors, and many farmworkers.

(a)   requires minimal specialized skills and education, such as the operation of certain types of equipment. They usually earn an hourly wage. Examples include lifeguards, construction, and factory workers.

(a)   requires specialized abilities and training to do tasks such as operating complicated equipment. Skilled workers need little supervision, yet usually earn hourly wages. Examples include auto mechanics, bank tellers, plumbers, firefighters, etc.

(a)   demands advanced skills and education. Professionals are usually white-collar workers who receive a salary. Examples include managers, bankers, doctors, lawyers, computer programmers, professional athletes, etc.