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WorksheetsTypes of Business & Economic Systems
Total questions: 50
Worksheet time: 5hrs 24mins
What is one advantage of forming an LLC?
Double taxation
Unlimited liability for owners
Limited liability for owners
Exemption from state regulations
What does an LLC separate to protect owners from debts and liabilities?
Personal assets
Corporate assets
Tax obligations
Partnership interests
What is the primary disadvantage of an LLC upon the death or bankruptcy of a member?
Mandatory dissolution
Double taxation
Unlimited liability
Excessive taxation
What does it mean for an LLC to have 'flow-through' taxation?
Taxes flow directly to the government
Taxes flow directly to the corporate level
Taxes flow directly to the shareholders
Taxes flow directly to the members' personal tax returns
A business run by 2 or more people and has unlimited liability is known as a:
Company
Sole Proprietorship
Partnership
Corporation
Advantages of a sole proprietorship are: (2)
Limited liability
The owner makes all the decisions
The owner takes all the profit
Can raise substantial capital
Advantages of a partnership are: (3)
The partners split the profit
Unlimited liability
Raise more capital than a sole proprietor
Share the workload and expenses
Share liability
What is the name of a person who owns part of a corporation? (2)
Stockholder
Partnership
The Chairman of the Board of Directors of a corporation: (select all that apply)
Oversees the day to day operations of the business
The intermediary between the Board and the Officers (CEO, CFO, etc.)
The most powerful person in the corporation
Sometimes both Chairman AND CEO (President)
Selected by the Board of Directors
The major policy and financial decision makers of a corporation, but do not "run" it are determined by the...
CEO/President
Officers of the LLC
Which of the following best describes the term "limited liability" If the business fails, is in debt or in legal trouble?
Personal possessions of the owner can be taken to pay any debts
The owner is personally liable for all the debts of the business
There is no limit on the amount the owner has to pay to settle debts
The owners only risks the loss of the amount invested
Which of the following are drawbacks for an entrepreneur setting up a business as a sole proprietor? (2)
Profit is shared
Financial accounts are kept private
Limited liability
Unlimited liability
Difficulty in obtaining capital
Which of the following is/are an advantage of operating a large established business as a corporation? (2)
Shares can be sold to the public to raise additional capital
Financial accounts are published
Shares can only be sold to invited investors to raise finance
Owners have unlimited liability
Owners are only liable for the amount invested
A privately held corporation may change into a public corporation because it wants to:
Gain limited liability
Raise capital to expand and grow
Enjoy the profits without having to run the company
Avoid a takeover from another business
Which legal structure would an individual wishing to start-up a small business choose because it is quick, easy and inexpensive to set up?
Sole proprietorship
Partnership
Privately Held Corporation
Corporation
What form of business ownership is subject to the least taxation and government regulation?
Sole Proprietorship
Limited Partnership
Family owned business
Corporation
Important aspects of a corporation, such as the name, information about the stock issued, Number of the Board of Directors, principal officers and their responsibilities, and a description of the firm’s operations, are contained in a:
Mission statement
Policy statement
Charter
Plan of operations
Venture
The members of the Board of Directors of a corporation are chosen by the:
President and chief officers
Creditors
General partners
Stockholders
Securities and Exchange Commission
When ownership of a corporation is restricted to a small group of investors, the original owners, and owners family, it is a:
Publicly held corporation
Government owned corporation
Partnership
Privately held corporation
Privately traded corporation
Owners of this type of business form may receive a portion of the profits (dividends).
The life of this business form is NOT limited to the life of the owner(s) - it has "unlimited life".
This company has the largest market capitalization in the world, worth more than $2.8 trillion!
Amazon
Apple
Microsoft
Alphabet (Google)
Wal-Mart
All are advantages of a sole proprietorship except:
Easy to form
Be your own boss
Keep all the profits
The success or failure is 100% the responsibility of the owner
All the following are advantages of a partnership except:
Additional capital to improve the business
Sharing problems and responsibilities
Easy to organize
Business expenses are share
Partners sometimes disagree on how to run the business
Which statistic is accurate?
Sole proprietorships and partnerships are about 75% of businesses, but only generate about 15% of business activity
Corporations are about 75% of business, but generate about 15% of business activity
Partnerships are about 10% of businesses, but generate 15% of business activity
Corporations are about 15% of businesses and generate 50% of business activity
All are advantages of corporations except:
Unlimited life
Limited Liability
Ease of transfer (of ownership)
Rate of taxation
An advantage for a corporation, but often a disadvantage for society is:
Corporations have the legal rights of a person without any single person being responsible for its actions
Corporations are not held accountable for improper or illegal actions
Corporations can provide vast numbers of goods and services at lower prices then a sole proprietorship can
Since corporations are not owned by any one person they are free to do almost anything the want
Which of the following positions does not belong with the others?
President/CEO
Vice-Presidents
Supervising managers
Chief Financial Officer
Chief Operating Officer
The worlds largest corporation doesn't actually "make" anything. What is that company?
*Largest by sales, not market capitalization
Apple
wal-Mart
P&G
GE
Comcast
Since there are thousands, if not millions of owners of a corporation, two of the only ways that keep them from morally questionable behaviour or illegal acts are: (2)
The stockholders could have their shares confiscated by the Securities and Exchange Commission
Most of the top officers and Board of Directors are large shareholders, and such actions could lower the price of their shares
Bad behaviour could lead the stockholders to "fire" the Board, the the Chairman and the President
The officers could be publicly humiliated and shamed
Corporations are legally required to hold an annual stockholders meeting. At this meeting: (2)
Shareholders elect the Board of Directors
Shareholders select the President/CEO
Shareholders select the Chairman of the Board
Stockholders determine what new products will be offered, what stores to keep open or close, and what prices to charge for what the company sells
Anyone who owns a share of stock is entitled to attend and vote for the Board of Directors
The head of the Board of Directors is called the...
Chief Executive Officer
President
Chairman of the Board
None of these
Who became the leading advocate of laissez-faire economics?
Thomas Malthus
David Ricardo
Adam Smith
Karl Marx
What did Adam Smith call the ability of the marketplace to respond to public demand without government involvement?
Market manipulation
Government control
Regulatory mechanism
Invisible hand
laissez-faire
opposed to government regulation of business
government should control major industries
government should be eliminated
nations should avoid trade
Karl Marx wrote which of the following:
The Wealth of Nations
The Communist Manifesto
Mein Kampf
Peace of Paris
Political and economic theory that developed to form the base of communism.
Communism
Socialism
Capitalism
Marxism
Reorder the following in the order that Marx believed society would reach it's ideal state.
Capitalism
Socialism
Communism
What did Marx believe was the cause of capitalist crises?
Lack of innovation
Political instability
Overproduction
Shortage of resources
What did Marx call the psychological tendency of putting economic interests at the heart of people's lives?
Wealth fixation
Capitalist mindset
Economic obsession
Commodity fetishism
What did Marx believe was the reason for the tension and oppression in bourgeois marriage?
Social pressure
Lack of communication
Financial reasons
Lack of love
Which statement would be MOST important to include in a summary of the article?
New companies rely on supply and demand to decide which goods they want to produce.
People feel that the too much involvement in the economy by the government is not beneficial.
The American economy is mostly a free-enterprise system with some control from the government.
Much of the labor force in the United States is transitioning from farms to cities for work.
The word "socialism" is used to describe a variety of different economic concepts that are different from what Karl Marx first theorized. Select what could be considered "socialist" in the modern world:
A nation with universal healthcare paid for by taxation of everyone.
A nation owns key industries, such as a national airline, in order to keep prices lower for its people
A nation has programs that provide for unemployment and housing (if necessary), as well as retirement benefits for everyone
Businesses are owned by the employees who share the profits
Social Security system in the U.S.
What is the goal of a business plan?
To obtain specialists
To obtain funding
To obtain employees
To obtain free advertising
