Topic 2.2 - Corporations and the Rise of Big Business

What was the main reason for the rise of big business in the United States?

• Access to raw materials

• Expansion of markets

• Investment of private financial resources

• Development of new technology

What is a corporation?

• A business run by one person or family

• A form of group ownership where multiple people share the ownership of a business

• A business organization that focuses on vertical integration

• A business organization that focuses on horizontal integration

What are the economic advantages of being a big business?

• Lower cost per unit as volume increases

• Larger production facilities for increased volume

• Bulk pricing of raw materials

• All of the above

What is horizontal integration?

• The control of different businesses involved in all stages of manufacturing a product

• The consolidation of many firms in the same business

• The process of buying out competitors or driving them out of business

• The process of merging competing firms into a giant company

What is vertical integration?

• The control of different businesses involved in all stages of manufacturing a product

• The consolidation of many firms in the same business

• The process of buying out competitors or driving them out of business

• The process of merging competing firms into a giant company

What is the Sherman Antitrust Act?

• A law that outlawed any trust that operated in restraint of trade or commerce among the several states

• A federal agency created to monitor railroad shipping rates

• A management innovation designed to maximize the efficiency of a production process

• A law that regulated the practices of labor unions

What is Social Darwinism?

• The theory that animals evolved by a process of natural selection

• The theory that wealth is a measure of one's inherent value

• The theory that the government should stay out of private business

• The theory that competition is necessary for the survival of the fittest

What was the purpose of the Interstate Commerce Commission?

• To monitor railroad shipping rates

• To regulate trusts and monopolies

• To enforce the Sherman Antitrust Act

• To promote fair competition in the marketplace

What were some of the advantages of big business according to its supporters?

• Creation of jobs for a growing labor force

• Lower prices for consumers

• Stimulation of innovation and economic growth

• All of the above

What were some of the criticisms of big business?

• Elimination of competition and unfair business practices

• Poor wages and working conditions for workers

• High prices set by monopolies and cartels

• All of the above