1. Business Organizations and Economic Institutions
Chapter 3
Business Organizations and Economic Institutions

2. Question #1
A business organization in which at least one partner is NOT active in the daily running of the business?
A) General Partnership
B) Corporation
C) Limited Partnership
D) Labor Union

3. Question #1
A business organization in which at least one partner is NOT active in the daily running of the business?
A) General Partnership
B) Corporation
C) Limited Partnership
D) Labor Union

4. Question #2 Represents nonvoting ownership of a corporation?
A) General Partnership
B) Preferred Stock
C) Limited Partnership
D) Common Stock

5. Question #2 Represents nonvoting ownership of a corporation?
A) General Partnership
B) Preferred Stock
C) Limited Partnership
D) Common Stock

6. Question #3
A business organization in which all partners are responsible for the management and financial obligations of the business?
A) General Partnership
B) Corporation
C) Limited Partnership
D) Labor Union

7. Question #3
A business organization in which all partners are responsible for the management and financial obligations of the business?
A) General Partnership
B) Corporation
C) Limited Partnership
D) Labor Union

8. Question #4
Represents basic ownership of a corporation, includes voting rights?
A) General Partnership
B) Preferred Stock
C) Limited Partnership
D) Common Stock

9. Question #4
Represents basic ownership of a corporation, includes voting rights?
A) General Partnership
B) Preferred Stock
C) Limited Partnership
D) Common Stock

10. Question #5
A business organization recognized by law as a separate legal entity having all the rights of an individual?
A) General Partnership
B) Corporation
C) Limited Partnership
D) Labor Union

11. Question #5
A business organization recognized by law as a separate legal entity having all the rights of an individual?
A) General Partnership
B) Corporation
C) Limited Partnership
D) Labor Union

12. Question #6
What is the most common form of business organization in the United States?
A) Sole proprietorship
B) Partnership
C) Corporation
D) Limited partnership

13. Question #6
What is the most common form of business organization in the United States?
A) Sole proprietorship
B) Partnership
C) Corporation
D) Limited partnership

14. Question #7
What is the main strength of the corporation form of business organization?
A) Ease of raising financial capital
B) Ease of establishment
C) Ease of management
D) Freedom from business income taxes

15. Question #7
What is the main strength of the corporation form of business organization?
A) Ease of raising financial capital
B) Ease of establishment
C) Ease of management
D) Freedom from business income taxes

16. Question #8
What term refers to a written promise issued by a corporation to repay borrowed money at a later date?
A) Stock
B) Charter
C) Bond
D) Proxy

17. Question #8
What term refers to a written promise issued by a corporation to repay borrowed money at a later date?
A) Stock
B) Charter
C) Bond
D) Proxy

18. Question #9
Which of the following is NOT characteristic of the corporate form of organization?
A) Proxy
B) Limited life
C) Limited liability
D) Board of directors

19. Question #9
Which of the following is NOT characteristic of the corporate form of organization?
A) Proxy
B) Limited life
C) Limited liability
D) Board of directors

20. Question #10
All of the following are strengths of the partnership form of business organization EXCEPT?
A) Ease of management
B) Limited life
C) Ease of establishment
D) Lack of special taxes

21. Question #10
All of the following are strengths of the partnership form of business organization EXCEPT?
A) Ease of management
B) Limited life
C) Ease of establishment
D) Lack of special taxes

22. Question #11
A business combination involving firms that produce the same kind of product?
A) Vertical merger
B) Conglomerate
C) Multinational
D) Horizontal merger

23. Question #11
A business combination involving firms that produce the same kind of product?
A) Vertical merger
B) Conglomerate
C) Multinational
D) Horizontal merger

24. Question #12
A firm that has at least four businesses, each making unrelated products, none of which is responsible for a majority of its sales?
A) Vertical merger
B) Conglomerate
C) Multinational
D) Horizontal merger

25. Question #12
A firm that has at least four businesses, each making unrelated products, none of which is responsible for a majority of its sales?
A) Vertical merger
B) Conglomerate
C) Multinational
D) Horizontal merger

26. Question #13
A corporation that has operations in a number of different countries?
A) Merger
B) Conglomerate
C) Sole proprietorship
D) Multinational

27. Question #13
A corporation that has operations in a number of different countries?
A) Merger
B) Conglomerate
C) Sole proprietorship
D) Multinational

28. Question #14
A combination of two or more business entities into a single firm?
A) Vertical merger
B) Conglomerate
C) Merger
D) Horizontal merger

29. Question #14
A combination of two or more business entities into a single firm?
A) Vertical merger
B) Conglomerate
C) Merger
D) Horizontal merger

30. Question #15
A business combination including firms involved in different steps of manufacturing or marketing?
A) Vertical merger
B) Conglomerate
C) Multinational
D) Horizontal merger

31. Question #15
A business combination including firms involved in different steps of manufacturing or marketing?
A) Vertical merger
B) Conglomerate
C) Multinational
D) Horizontal merger

32. Question #16
All of the following are true of multinational corporations EXCEPT?
A) Multinationals help spread technology
B) Multinationals have no weaknesses
C) Multinationals create new jobs
D) Multinationals produce tax revenue

33. Question #16
All of the following are true of multinational corporations EXCEPT?
A) Multinationals help spread technology
B) Multinationals have no weaknesses
C) Multinationals create new jobs
D) Multinationals produce tax revenue

34. Question #17 What is a major reason for conglomerate mergers?
A) Diversification
B) Multinationals
C) Unlimited life
D) Conglomeration

35. Question #17 What is a major reason for conglomerate mergers?
A) Diversification
B) Multinationals
C) Unlimited life
D) Conglomeration

36. Question #18 Which of the following statements is TRUE?
A) All conglomerates are multinationals
B) All multinationals are conglomerates
C) A conglomerate is another term for multinational
D) Multinationals are often conglomerates

37. Question #18 Which of the following statements is TRUE?
A) All conglomerates are multinationals
B) All multinationals are conglomerates
C) A conglomerate is another term for multinational
D) Multinationals are often conglomerates

38. Question #19
Which are important for their ability to move resources, products, and financial capital across national boundaries with relative ease?
A) Combinations
B) Conglomerates
C) Mergers
D) Multinationals

39. Question #19
Which are important for their ability to move resources, products, and financial capital across national boundaries with relative ease?
A) Combinations
B) Conglomerates
C) Mergers
D) Multinationals

40. Question #20
Which of the following is NOT a common reason for a business combination?
A) A business wants to be more efficient
B) A business wants to be larger
C) A business wants to change its name
D) A business wants to protect itself against the loss of supplies

41. Question #20
Which of the following is NOT a common reason for a business combination?
A) A business wants to be more efficient
B) A business wants to be larger
C) A business wants to change its name
D) A business wants to protect itself against the loss of supplies

42. Question #21
Which of the following is an example of a service cooperative?
A) Greenville Teachers’ Credit Union
B) Association of Manufacturing Workers
C) Better Business Bureau
D) Mason Chamber of Commerce

43. Question #21
Which of the following is an example of a service cooperative?
A) Greenville Teachers’ Credit Union
B) Association of Manufacturing Workers
C) Better Business Bureau
D) Mason Chamber of Commerce

44. Question #22
Which of the following best illustrates the indirect role of government?
A) a state park
B) a city’s fire department
C) the Tennessee Valley Authority (TVA)
D) regulation of public utilities

45. Question #22
Which of the following best illustrates the indirect role of government?
A) a state park
B) a city’s fire department
C) the Tennessee Valley Authority (TVA)
D) regulation of public utilities

46. Question #23
All of the following are major types of cooperatives EXCEPT?
A) Consumer
B) Government
C) Producer
D) Service

47. Question #23
All of the following are major types of cooperatives EXCEPT?
A) Consumer
B) Government
C) Producer
D) Service

48. Question #24
What type of economic institution engages in collective bargaining?
A) Labor Union
B) Producer cooperative
C) Nonprofit organization
D) Chamber of commerce

49. Question #24
What type of economic institution engages in collective bargaining?
A) Labor Union
B) Producer cooperative
C) Nonprofit organization
D) Chamber of commerce

50. Question #25 Why are government controls needed on public utilities?
A) Public utilities are investor or municipal owned
B) Public utilities usually have no competition
C) Public utilities provide important public services
D) Public utilities are responsible for water and electric services

51. Question #25 Why are government controls needed on public utilities?
A) Public utilities are investor or municipal owned
B) Public utilities usually have no competition
C) Public utilities provide important public services
D) Public utilities are responsible for water and electric services