Unit 3 Review

What type of merger occurs when two companies in the same industry, each making something in a different stage of the production process, merge?

• Vertical

• Horizontal

• Conglomerate

• Lateral

Which of these is NOT a way that entrepreneurs/businesses respond when competition enters the market?

• Lower prices

• Improve their product

• Find other ways to stay competitive

• Increase prices

What is the difference between offshoring and outsourcing?

• Offshoring is done locally, outsourcing is done internationally.

• Offshoring involves moving production overseas, outsourcing involves hiring external companies.

• Offshoring is cheaper than outsourcing.

• Offshoring and outsourcing are the same.

Why do professional laborers usually make more money than unskilled laborers?

• Because the supply of unskilled laborers is smaller

• Because the supply of professional laborers is larger

• Because the supply of professional laborers is smaller

• Because of the demand of unskilled laborers is lower

What is the name of the process in which labor unions negotiate with employers?

• Mediation

• Arbitration

• Collective bargaining

• Litigation

What is limited liability?

• It means you are legally and financially responsible

• It means that the business is personally and financially responsible, not you

• It means that you are legally responsible but not financially responsible

• It means that the business is legally responsible but not financially responsible

In supply and demand of labor, the number of laborers is the ______ and the number of job openings is the ______.

• supply, demand

• demand, supply

• surplus, shortage

• shortage, surplus

What is the difference between arbitration and mediation?

• Mediation is an informal process, arbitration is binding

• Mediation involves a lawyer, arbitration does not

• Mediation never results in strikes, arbitration always does

• They are the same thing

What is a horizontal merger?

• A merger between companies in different industries

• A merger between companies at different stages of production

• A merger between companies in the same industry and stage of production

• A merger between companies in different countries

Which type of business organization is easiest to establish?

• Sole proprietorship

• Corporation

• General partnership

• Limited partnership