Economics Quarter Exam

Match the following statements with their advantages of sole proprietorship.

• Retains all earnings from the business.

• All of the above statements are true.

• Comprehensive benefits of sole proprietorship.

• There are almost no requirements to start up a sole proprietorship.

• Minimal legal formalities and paperwork.

• The owner makes all the decisions.

• Complete control over business operations.

• The owner keeps all the profits.

Limited life applies to _______.

• multinationals

• sole proprietorships

• partnerships

• nonprofit organizations

• corporations

A person who wishes to incorporate a business needs to (a)   .

• find stockholders
• pay the government dividends
• file for permission with the govern
• do all of the above

Kai runs a small business and wants to calculate the net income. A business’s net income is defined as _______.

• total sales before expenses

• total income after expenses

• total dividends paid to investors

• total expenses before sales

Match the following types of mergers with their descriptions.

• When a company merges with another company that operates in multiple countries.

• horizontal merger

• When a company merges with another company that is in its supply chain.

• conglomerate

• When two companies that produce the same kind of product merge.

• vertical merger

• When a company merges with another company in a completely different industry.

• multinational merger

What is the main purpose of incubators?

• helping entrepreneurs think of new business ideas

• providing entrepreneurs with training to be successful

• helping entrepreneurs find investors

• both A and C

A venture capitalist’s main goal is usually to _______.

• help individuals achieve their dreams

• help their communities

• get a good return on an investment

• teach entrepreneurs managerial skills

Which of the following is true of both nonprofit organizations and for-profit corporations?

• They both pay income taxes.

• They both pay dividends.

• They both use scarce factors of production.

• They both issue stock.

Which of the following is true about nonprofit organizations?

• The results of their efforts can be analyzed in the same way as for-profit businesses.

• They work in a businesslike way to promote member interests.

• Most are informal businesses that are not incorporated.

• They make up an insignificant part of the economy.

Abigail is part of a nonprofit organization that provides services to its members, called a (a)   .

• charity co-op

• service co-op

• producer co-op

• consumer co-op

• market co-op