Firms Flashcard

Front

What is a business firm?

Back

An organization that uses resources to produce goods and services

Front

Why do business firms exist?

Back

To make profits, To provide employment, To produce goods and services

Front

What is a sole proprietorship?

Back

A business owned by one individual.

Front

What is a partnership?

Back

A business owned by multiple partners

Front

What is a corporation?

Back

A business owned by stockholders.

Front

What is limited liability?

Back

The responsibility to pay only the amount invested in the firm.

Front

What is the advantage of a sole proprietorship?

Back

Easy to form and dissolve

Front

What is the advantage of a partnership?

Back

Specialization of tasks

Front

What is the disadvantage of a corporation?

Back

Double taxation

Front

Who are the owners of a corporation?

Back

Stockholders