Econ Chapter 8 and 9 Test

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Megazostradon
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Econ Chapter 8 and 9 Test
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2010-03-19 02:07:42
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Econ Chpt 8 and 9 Test
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Questions and answers for Econ Chapter 8 and 9 Test.
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  1. 5 Advantages of a sole proprietorship:
    • Ease of start up
    • Relatively few regulations
    • Sole receiver of profit
    • Full control
    • Easy to discontinue
  2. 2 Disadvantages of a sole proprietorship:
    • Unlimited personal liability
    • Lack of permanence
  3. 3 Types of partnerships:
    • 1. general partnership
    • 2. Limited partnerships
    • 3. Limited liability partnership
  4. 3 Advantages in Partnerships:
    • 1. Ease of start-up
    • 2. Shared decision making and specialization
    • 3. Larger pool of capital
  5. 2 Disadvantages of Partnerships:
    • 1. Unlimited liability
    • 2. Potential for conflict
  6. 2 types of Corporations:
    • 1. Closely held
    • 2. Publicly Held
  7. 4 Advantages of Incorporation:
    • 1. Limited Liability
    • 2. Transferable ownership
    • 3. Ability to attract capital
    • 4. Long life
  8. 4 Disadvantages of Incorporation:
    • 1. Expense and difficulty of start-up
    • 2. Double taxation
    • 3. Potential loss of control by the founders
    • 4. More legal requirments and regulations
  9. Name and explain the 3 types of Corporate Combonations:
    • 1. Horizontal Mergers: when you join 2 or more firms competing in the same market with the same good or service. Ex: 2 automaker, Chrysler Corporation and Daimler-Benz, merged to form DaimlerChrysler in 1998.
    • 2. Vertical Mergers: when you join 2 or more firms involved in different stages of producing the same good or service. They control all phases of production, rather than rely on the goods or services of outside suppliers.
    • 3. Conglomerates: when firms buy other companies that produce totally unrelated goods or services. Like Johnson and Johnson.
  10. What is a Multinational Corporation? Give an example.
    A large corporation that produces and sells its goods and services throughout the world. Ex: McDonalds.
  11. Advantages of Multinationals:
    • Provide jobs and products through the world
    • Spread new technology and production methods
    • Jobs raise standard of living
  12. Disadvantages of Multinationals:
    • Negatively influence culture and politics in the countries in which they operate
    • The wages are low
  13. 6 Advantages of Franchises:
    • 1. Built in reputation
    • 2. Management training and support
    • 3. Standardized quality
    • 4. national advertising program
    • 5. financial assisstance
    • 6. centralized buying power
  14. 4 Disadvantages of Franchises:
    • 1. high franchising fees and royalties
    • 2. strict operating standards
    • 3. purchase restrictions
    • 4. limited product line
  15. 3 Categories of Cooperative Organizations:
    • 1. Consumer Cooperatives
    • 2. Service Cooperatives
    • 3. Producer Cooperatives
  16. What is a Nonprofit Organization? Give 3 examples.
    Institution that functions much like a business, but does not operate for the purpose of generating profits. Ex: Hospitals, museums, and YMCA.
  17. What are professional organizations?
    Nonprofit organizations that works to improve the image, working conditions, and skill levels of people in particular occupations. Ex: The American Medical association(PO) opposes advertising. It believes doctors present a less professional, authoritive, and caring image if they advertise for patients.
  18. What are business associations?
    Nonprofit organization that promotes collective business interests for a city, state, etc., or for a group of similar businesses.
  19. 3 requirements for the employed:
    • Worked for 1hr for pay in the past week
    • Worked 1hr or more but were unpayed in a family business.
    • Held a job but didn't work to do vacation, illness, labor disputes, or bad weather
  20. 2 Requirements for the Unemployed:
    • Temporarily out of work
    • They are not looking for a job but have looked for one in the past 4 weeks
  21. What were the historical trends from the Bureau of Labor Stistics?
    The labor force in relation to U.S. population increased from 59.2% in 1950 to 66.6% in 2003 to 68% in 2010

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