Chapter 3 Business Organizations and Economic Institutions

Chapter 3Chapter 3

Business Organizations Business Organizations and Economic and Economic

InstitutionsInstitutions

Question #1Question #1

• A business organization in which at A business organization in which at least one partner is NOT active in the least one partner is NOT active in the daily running of the business?daily running of the business?

– A) General PartnershipA) General Partnership– B) CorporationB) Corporation– C) Limited PartnershipC) Limited Partnership– D) Labor UnionD) Labor Union


• A business organization in which at A business organization in which at least one partner is NOT active in the least one partner is NOT active in the daily running of the business?daily running of the business?



• Represents nonvoting ownership of a Represents nonvoting ownership of a corporation?corporation?

– A) General PartnershipA) General Partnership– B) Preferred StockB) Preferred Stock– C) Limited PartnershipC) Limited Partnership– D) Common StockD) Common Stock


• Represents nonvoting ownership of a Represents nonvoting ownership of a corporation?corporation?



• A business organization in which all A business organization in which all partners are responsible for the partners are responsible for the management and financial management and financial obligations of the business?obligations of the business?



• A business organization in which all A business organization in which all partners are responsible for the partners are responsible for the management and financial management and financial obligations of the business?obligations of the business?



• Represents basic ownership of a Represents basic ownership of a corporation, includes voting rights?corporation, includes voting rights?



• Represents basic ownership of a Represents basic ownership of a corporation, includes voting rights?corporation, includes voting rights?



• A business organization recognized A business organization recognized by law as a separate legal entity by law as a separate legal entity having all the rights of an individual?having all the rights of an individual?



• A business organization recognized A business organization recognized by law as a separate legal entity by law as a separate legal entity having all the rights of an individual?having all the rights of an individual?



• What is the most common form of What is the most common form of business organization in the United business organization in the United States?States?

– A) Sole proprietorshipA) Sole proprietorship– B) PartnershipB) Partnership– C) CorporationC) Corporation– D) Limited partnershipD) Limited partnership


• What is the most common form of What is the most common form of business organization in the United business organization in the United States?States?

– A) Sole proprietorshipA) Sole proprietorship– B) PartnershipB) Partnership– C) CorporationC) Corporation– D) Limited partnershipD) Limited partnership


• What is the main strength of the What is the main strength of the corporation form of business corporation form of business organization? organization?

– A) Ease of raising financial capitalA) Ease of raising financial capital– B) Ease of establishmentB) Ease of establishment– C) Ease of managementC) Ease of management– D) Freedom from business income D) Freedom from business income

taxestaxes


• What is the main strength of the What is the main strength of the corporation form of business corporation form of business organization? organization?

– A) Ease of raising financial capitalA) Ease of raising financial capital– B) Ease of establishmentB) Ease of establishment– C) Ease of managementC) Ease of management– D) Freedom from business income D) Freedom from business income

taxestaxes


• What term refers to a written promise What term refers to a written promise issued by a corporation to repay issued by a corporation to repay borrowed money at a later date?borrowed money at a later date?

– A) StockA) Stock– B) CharterB) Charter– C) BondC) Bond– D) ProxyD) Proxy


• What term refers to a written promise What term refers to a written promise issued by a corporation to repay issued by a corporation to repay borrowed money at a later date?borrowed money at a later date?

– A) StockA) Stock– B) CharterB) Charter– C) BondC) Bond– D) ProxyD) Proxy


• Which of the following is NOT Which of the following is NOT characteristic of the corporate form characteristic of the corporate form of organization?of organization?

– A) ProxyA) Proxy– B) Limited lifeB) Limited life– C) Limited liabilityC) Limited liability– D) Board of directorsD) Board of directors


• Which of the following is NOT Which of the following is NOT characteristic of the corporate form characteristic of the corporate form of organization?of organization?

– A) ProxyA) Proxy– B) Limited lifeB) Limited life– C) Limited liabilityC) Limited liability– D) Board of directorsD) Board of directors


• All of the following are strengths of All of the following are strengths of the partnership form of business the partnership form of business organization EXCEPT? organization EXCEPT?

– A) Ease of managementA) Ease of management– B) Limited lifeB) Limited life– C) Ease of establishmentC) Ease of establishment– D) Lack of special taxesD) Lack of special taxes


• All of the following are strengths of All of the following are strengths of the partnership form of business the partnership form of business organization EXCEPT? organization EXCEPT?

– A) Ease of managementA) Ease of management– B) Limited lifeB) Limited life– C) Ease of establishmentC) Ease of establishment– D) Lack of special taxesD) Lack of special taxes


• A business combination involving A business combination involving firms that produce the same kind of firms that produce the same kind of product?product?

– A) Vertical mergerA) Vertical merger– B) ConglomerateB) Conglomerate– C) MultinationalC) Multinational– D) Horizontal mergerD) Horizontal merger


• A business combination involving A business combination involving firms that produce the same kind of firms that produce the same kind of product?product?



• A firm that has at least four A firm that has at least four businesses, each making unrelated businesses, each making unrelated products, none of which is responsible products, none of which is responsible for a majority of its sales?for a majority of its sales?



• A firm that has at least four A firm that has at least four businesses, each making unrelated businesses, each making unrelated products, none of which is responsible products, none of which is responsible for a majority of its sales?for a majority of its sales?



• A corporation that has operations in A corporation that has operations in a number of different countries?a number of different countries?

– A) MergerA) Merger– B) ConglomerateB) Conglomerate– C) Sole proprietorshipC) Sole proprietorship– D) MultinationalD) Multinational


• A corporation that has operations in A corporation that has operations in a number of different countries?a number of different countries?

– A) MergerA) Merger– B) ConglomerateB) Conglomerate– C) Sole proprietorshipC) Sole proprietorship– D) MultinationalD) Multinational


• A combination of two or more A combination of two or more business entities into a single firm?business entities into a single firm?

– A) Vertical mergerA) Vertical merger– B) ConglomerateB) Conglomerate– C) MergerC) Merger– D) Horizontal mergerD) Horizontal merger


• A combination of two or more A combination of two or more business entities into a single firm?business entities into a single firm?

– A) Vertical mergerA) Vertical merger– B) ConglomerateB) Conglomerate– C) MergerC) Merger– D) Horizontal mergerD) Horizontal merger


• A business combination including A business combination including firms involved in different steps of firms involved in different steps of manufacturing or marketing?manufacturing or marketing?



• A business combination including A business combination including firms involved in different steps of firms involved in different steps of manufacturing or marketing?manufacturing or marketing?



• All of the following are true of All of the following are true of multinational corporations EXCEPT?multinational corporations EXCEPT?

– A) Multinationals help spread A) Multinationals help spread technologytechnology

– B) Multinationals have no weaknessesB) Multinationals have no weaknesses– C) Multinationals create new jobsC) Multinationals create new jobs– D) Multinationals produce tax revenueD) Multinationals produce tax revenue


• All of the following are true of All of the following are true of multinational corporations EXCEPT?multinational corporations EXCEPT?

– A) Multinationals help spread A) Multinationals help spread technologytechnology

– B) Multinationals have no weaknessesB) Multinationals have no weaknesses– C) Multinationals create new jobsC) Multinationals create new jobs– D) Multinationals produce tax revenueD) Multinationals produce tax revenue


• What is a major reason for What is a major reason for conglomerate mergers?conglomerate mergers?

– A) DiversificationA) Diversification– B) MultinationalsB) Multinationals– C) Unlimited lifeC) Unlimited life– D) ConglomerationD) Conglomeration


• What is a major reason for What is a major reason for conglomerate mergers?conglomerate mergers?

– A) DiversificationA) Diversification– B) MultinationalsB) Multinationals– C) Unlimited lifeC) Unlimited life– D) ConglomerationD) Conglomeration


• Which of the following statements is Which of the following statements is TRUE?TRUE?

– A) All conglomerates are multinationalsA) All conglomerates are multinationals– B) All multinationals are conglomeratesB) All multinationals are conglomerates– C) A conglomerate is another term for C) A conglomerate is another term for

multinational multinational– D) Multinationals are often D) Multinationals are often

conglomeratesconglomerates


• Which of the following statements is Which of the following statements is TRUE?TRUE?

– A) All conglomerates are multinationalsA) All conglomerates are multinationals– B) All multinationals are conglomeratesB) All multinationals are conglomerates– C) A conglomerate is another term for C) A conglomerate is another term for

multinational multinational– D) Multinationals are often D) Multinationals are often

conglomeratesconglomerates


• Which are important for their ability Which are important for their ability to move resources, products, and to move resources, products, and financial capital across national financial capital across national boundaries with relative ease?boundaries with relative ease?

– A) CombinationsA) Combinations– B) ConglomeratesB) Conglomerates– C) MergersC) Mergers– D) MultinationalsD) Multinationals


• Which are important for their ability Which are important for their ability to move resources, products, and to move resources, products, and financial capital across national financial capital across national boundaries with relative ease?boundaries with relative ease?

– A) CombinationsA) Combinations– B) ConglomeratesB) Conglomerates– C) MergersC) Mergers– D) MultinationalsD) Multinationals


• Which of the following is NOT a Which of the following is NOT a common reason for a business common reason for a business combination?combination?

– A) A business wants to be more efficientA) A business wants to be more efficient– B) A business wants to be largerB) A business wants to be larger– C) A business wants to change its nameC) A business wants to change its name– D) A business wants to protect itself D) A business wants to protect itself

against the loss of supplies against the loss of supplies


• Which of the following is NOT a Which of the following is NOT a common reason for a business common reason for a business combination?combination?

– A) A business wants to be more efficientA) A business wants to be more efficient– B) A business wants to be largerB) A business wants to be larger– C) A business wants to change its nameC) A business wants to change its name– D) A business wants to protect itself D) A business wants to protect itself

against the loss of supplies against the loss of supplies


• Which of the following is an example Which of the following is an example of a service cooperative?of a service cooperative?

– A) Greenville Teachers’ Credit UnionA) Greenville Teachers’ Credit Union– B) Association of Manufacturing B) Association of Manufacturing

WorkersWorkers– C) Better Business BureauC) Better Business Bureau– D) Mason Chamber of CommerceD) Mason Chamber of Commerce


• Which of the following is an example Which of the following is an example of a service cooperative?of a service cooperative?

– A) Greenville Teachers’ Credit UnionA) Greenville Teachers’ Credit Union– B) Association of Manufacturing B) Association of Manufacturing

WorkersWorkers– C) Better Business BureauC) Better Business Bureau– D) Mason Chamber of CommerceD) Mason Chamber of Commerce


• Which of the following best illustrates Which of the following best illustrates the indirect role of government?the indirect role of government?

– A) a state parkA) a state park– B) a city’s fire departmentB) a city’s fire department– C) the Tennessee Valley Authority (TVA)C) the Tennessee Valley Authority (TVA)– D) regulation of public utilitiesD) regulation of public utilities


• Which of the following best illustrates Which of the following best illustrates the indirect role of government?the indirect role of government?

– A) a state parkA) a state park– B) a city’s fire departmentB) a city’s fire department– C) the Tennessee Valley Authority (TVA)C) the Tennessee Valley Authority (TVA)– D) regulation of public utilitiesD) regulation of public utilities


• All of the following are major types of All of the following are major types of cooperatives EXCEPT?cooperatives EXCEPT?

– A) ConsumerA) Consumer– B) GovernmentB) Government– C) ProducerC) Producer– D) ServiceD) Service


• All of the following are major types of All of the following are major types of cooperatives EXCEPT?cooperatives EXCEPT?

– A) ConsumerA) Consumer– B) GovernmentB) Government– C) ProducerC) Producer– D) ServiceD) Service


• What type of economic institution What type of economic institution engages in collective bargaining?engages in collective bargaining?

– A) Labor UnionA) Labor Union– B) Producer cooperativeB) Producer cooperative– C) Nonprofit organizationC) Nonprofit organization– D) Chamber of commerceD) Chamber of commerce


• What type of economic institution What type of economic institution engages in collective bargaining?engages in collective bargaining?

– A) Labor UnionA) Labor Union– B) Producer cooperativeB) Producer cooperative– C) Nonprofit organizationC) Nonprofit organization– D) Chamber of commerceD) Chamber of commerce


• Why are government controls needed on Why are government controls needed on public utilities?public utilities?

– A) Public utilities are investor or municipal A) Public utilities are investor or municipal owned owned

– B) Public utilities usually have no B) Public utilities usually have no competition competition

– C) Public utilities provide important public C) Public utilities provide important public services services

– D) Public utilities are responsible for water and D) Public utilities are responsible for water and electric services electric services


• Why are government controls needed on Why are government controls needed on public utilities?public utilities?

– A) Public utilities are investor or municipal A) Public utilities are investor or municipal owned owned

– B) Public utilities usually have no B) Public utilities usually have no competitioncompetition

– C) Public utilities provide important public C) Public utilities provide important public services services

– D) Public utilities are responsible for water and D) Public utilities are responsible for water and electric services electric services

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Chapter 3 Business Organizations and Economic Institutions