Business Organizations and Market Structures

An advantage of a corporation is that

• owners pay fewer taxes than owners of other forms of business.
• the business is subject to little government regulation.
• owners have limited liability for debt.
• owners have direct and immediate control over daily management of the business.

Perfect competition is characterized by

• a large number of sellers and buyers.
• diverse products.
• sellers acting together to set prices.
• uninformed buyers and sellers.

When a major car company lowers its prices, other car makers will probably 

• maintain existing prices.
• raise their prices.
• go out of business.
• lower their prices.

Barry and two associates have been operating a business that is not going well. Barry is stressed out because the company is over $200,000 in debt and he knows that if it goes out of business, he and his two associates will have to pay it out of their own pockets. It sounds like Barry and his two associates have a 

• partnership.
• corporation.
• sole proprietorship.
• stock.

Susan, Phil, Robert, and Martina are all lawyers. After several years of working for big firms, they decide to pull their resources and start their own law practice together. The four of them will make all their business decisions together and will share all of the profits and financial risk. Their new law firm is a 

• partnership
• corporation
• sole proprietorship
• monopoly

Mr. Simpson is liable for all the debts of his company. Mr.Simpson has which type of business organization?

• sole proprietorship
• monopoly
• perfect competition
• corporation

Which market has no competition?

• perfect competition
• oligopoly
• monopoly
• monopolistic competition

Bernice owns her own local gift shop. She acquired the necessary loans to open it, assumes all the financial risk herself, and makes all the decisions. It sounds like Bernice's business is a/an

• partnership
• franchise
• corporation
• sole proprietorship

Market structure where many firms compete for a share of the market through product differentiation

• partnership
• pure competition
• monopolistic competiton
• monopoly

Business owners face unlimited liability for business debts in:

• a corporation
• a partnership, but not in a sole proprietorship
• a sole proprietorship, but not a partnership
• both a sole proprietorship and a partnership