ECON Unit 2 Practice Test

  What are the 3 legal forms of business? [ More than one answer]

• Sole Proprietorship

• Partnership

• Corporation

• Cooperation

  Which form of business is the most common numerically.

• Sole Proprietorship

• Partnership

• Corporation

• Cooperation

Which form of business can sell stock?

• Sole Proprietorship

• Partnership

• Corporation

• Cooperation

The portion of corporate profits paid out to stockholders.

• Dividend

• Bond

• Premium

• Stock

Explain the difference between limited and unlimited liability

• Unlimited liability means that the owners are personally responsible for all debts owed. Limited liability means that debts of business are restricted to the shares of stock owned by business owners.

• Unlimited liability means that the owners are not personally responsible for all debts owed. Limited liability means that debts of business are restricted to the shares of stock owned by business owners.

• Unlimited is forever; and limited is for a short term.

1.    Explain the difference between general partnership and limited partnership?

• General partnership have unlimited liability and full management control and a limited partnership has limited liability and limited involvement in management.

• General Partnership you have limited liabilty and limited partnership you have is unlimited liabilty

• There is no such thing as Limited Partnership.

Liability is the…

• Necessity to do a lot of paper work.

• Requirement to offer fringe benefits.

• Legal obligations to pay debts.

• Opportunity of the sole proprietor to keep all profits after taxes.

Advertisement and giveaways are example of…

• Collusion

•   Non-price Competition

• Price-fixing

• Price-leadership

1.    If you carry a $3,000 deductible on your Collision coverage and you get in an accident that causes $15,000 in damages to your vehicle, how much will the insurance company pay to repair the damages to your vehicle?

• $15,000

• $12,000

• $0, it's not covered.

• $3,000

What is the name of the savings plan for education, which is operated by the states, or an educational institution?

• 529 Plan

• 445 Plan

• 750 Plan

• 225 Plan