ECONOMICS
Business Organization - Ch 8
1. Fill in
Business Organization
Asset
What is an establishment formed
to carry on a commercial enterprise?
What is the name of money and other valuable belongings to
an individual or business?
Sole Proprietorship
Limited Liability Partnership (LLP)
What is a business owned by and managed by a single individual?
What is a partnership in which all partners are limited partners?
Business License
Partnership
What is the authorization to start a business issued by the local government?
What is an organization owned by two or more persons who agree
on a specific division of responsibilities and profits?
Zoning Law
General Partnership
What is a law in a city or town that
designates separate areas for residency and for business?
What is a partnership in which partners share equally
in both responsibility and liability?
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Liability
Limited Partnership
What is the legally bound obligation to pay debts?
What is a partnership in which only one partner
is required to be a general partner?
Fringe Benefits
Losing only their investment
What is a payment other than wages or salaries?
What do Limited Partners risk?
Human Capital
Corporation
.
Limited access to resources include physical capital
(such as savings), time, and what else?
What is a legal entity owned by individual stockholders?
Conflict
Stock
What do all partnerships have the potential for?
What is a certificate of ownership in a corporation?
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Entrepreneur
Bond
What type of person typically starts up a business?
What is a formal contract to repay borrowed money
with interest at fixed intervals?
Closely Held Corporation
Multinational Corporation
What is a privately held corporation that rarely trades its stock?
What is a corporation that produce and sell
their goods and services throughout the world?
Conglomerate
Business Franchise
What is a combination of companies that produce
totally unrelated goods and services?
What is a semi-independent business that pays fees to a parent company
in return for all the exclusive rights to sell a certain service or product?
Royalty
Cooperative
What is the share of earnings given as a payment in a franchise?
What is a business organization owned and operated by
a group of individuals for their mutual benefit?
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Nonprofit Organization
Identify who this is:
Marcus Gurrola
15 extra credit points!
What is an institution that functions much like a business,
but does not operate for the purpose of earning profits?
2. What role do business licenses and zoning laws play in sole proprietorships?
Business licenses grant permission to undertake and carry out any business, while zoning laws influence
where businesses may be located.
3. What kind of liabilities are sole proprietorships subject to?
They are responsible for all debts that the business may acquire. They are said to have unlimited personal
liability.
4. How do the following differ?
-
See above vocabulary
5. How does a corporation work differ from a sole proprietorship or partnership?
A corporation has a legal identity beyond that of the owner or partners. It is owned by individual
stockholders.
6. Why must stock holders pay taxes on dividends?
Profit is a form of income, and dividends are the portion of corporate profits that is paid to stockholders.
Stockholders must then pay income tax on the profit they receive from dividends.
7. What is a merger? Combination of 2 or more corporations
What is the difference in the following?

Horizontal Merger: joins 2 or more firms that had competed in the same market to sell the same good or
service

Vertical Merger: joins 2 or more firms that are involved in different stages of producing the same good or
service

Conglomerate: combination of 3 or more businesses that sell unrelated goods and services
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8. Why are some corporations called multinational corporations?
They operate in more than one country at a time.
Week 8 of 10.
The 7th quiz towards your midterm.
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