Name: Date: Teacher: Crumedy Period:_____ Unit 2 Exam

Name: _______________________ Date:______________ Teacher: Crumedy Period:_____
Unit 2 Exam – Business Organizations and Market Structures
Multiple Choice: Choose the best answer choice
1. Unlike a general partnership, in a limited partnership
a. All partners share equal financial responsibility for the firm’s decisions
b. The inactive partner has limited liability for the business’s debt
c. The partners must pay special business taxes
d. The business does not end with the death of a partner
2. This regulates the sale of stock in a corporation.
a. Labor unions
b. Securities and Exchange Commission
c. stockbrokers
d. chamber of commerce
3. A merger of corporations involved in different steps of manufacturing or marketing is
known as a
a. Multinational merger
c. vertical merger
b. Horizontal merger
d. conglomerate
4. Non – profit organizations may
a. Issue stocks
b. Pay dividends
c. provide goods and services
d. pay income taxes
5. The local chamber of commerce works to
a. Promote the welfare of its members and the community
b. Earn dividends for members
c. Protect its members from consumer complaints
d. Aid member companies in negotiating with labor unions
6. In a general partnership,
a. The business continues even if one partner dies
b. Partners must pay specific business taxes
c. Partners usually draw up legal papers called articles of membership
d. Partners are only liable for the business’s debt up to the amount of their
7. All of the following are examples of the government playing a direct role in the economy
a. Public utility regulation
c. Court systems
b. Police and fire protection
d. Libraries
8. An advantage of a corporation is that
a. Owners pay fewer taxes than owners of other forms of business
b. The business is subject to little government regulation
c. Owners have limited liability for debt
d. Owners have direct and immediate control over daily management of the business
Name: _______________________ Date:______________ Teacher: Crumedy Period:_____
9. Which of the following is NOT a nonprofit organization?
a. Multinational
c. Chamber of Commerce
b. Producer cooperative
d. Labor union
Matching: Match the descriptions with the correct term.
a. Sole Proprietorship
b. Corporation
c. Interest
d. Principal
e. Multinational
10. Form of business organization recognized by law as a separate legal entity having all the
rights of an individual
11. Corporation that has manufacturing or service operations in a number of countries
12. Business owned and run by one person
13. Price paid for the use of another’s money
14. Money that is borrowed
Multiple Choice: Choose the best answer choice
15. ______________, sometimes called “bottom line,” is the net income and non – cash
charges such as depreciation.
a. Cash Flow
c. Conglomerate
b. Vertical
d. Multinationals
16. In a ___________ merger, companies that are involved in different steps of
manufacturing join together.
a. Cash Flow
c. Conglomerate
b. Vertical
d. Multinationals
17. During the 1970s and 1980s, _______________ mergers were popular in the United
a. Cash Flow
c. Conglomerate
b. Vertical
d. Multinationals
18. A ___________ is court – granted permission to an individual or business to cease or
delay paying debts.
a. Dividend
c. Bankruptcy
b. Stock
d. Net Income
19. Payment to a stockholder representing a portion of the corporate earnings is known as
a(n) _________.
a. Dividend
c. Bankruptcy
b. Stock
d. Net Income
Name: _______________________ Date:______________ Teacher: Crumedy Period:_____
20. ___________ is the total amount of revenues minus expenses, including taxes.
a. Dividend
c. Stock
b. Net Income
d. Expendable Income
Matching: Match each term with the correct statement below.
a. Price- fixing
c. Oligopoly
b. Laissez - faire
d. Perfect competition
21. Theoretical situation in which well – informed, independent buyers and sellers exchange
identical products
22. Agreeing to charge the same or similar prices
23. Belief that the government should not interfere with commerce or trade
24. Market structure in which a few very larger sellers dominate the industry
Multiple Choice: Choose the best answer choice
25. Perfect competition is characterized by all of the following EXCEPT
a. A large number of buyers and sellers
b. Identical products
c. Sellers acting together to set prices
d. Well – informed buyers and sellers
26. A monopoly that is based on the ownership or control of a manufacturing method,
process, or other scientific advance is a
a. Geographic monopoly
b. Natural monopoly
c. Government monopoly
d. Technological monopoly
27. The Sherman Antitrust Act
a. Outlawed restraints and monopolies that hindered trade
b. Nationalized railroads
c. Established the FDA
d. Applied only to banking
28. Under perfect competition,
a. Products are similar but not identical
b. Numerous restrictions prevent firms from entering the market
c. No seller sells a product above the prevailing market price
d. A single seller can affect price
Name: _______________________ Date:______________ Teacher: Crumedy Period:_____
29. When a major car company lowers its prices, other car makers will probably
a. Maintain existing prices
b. Raise their prices
c. Go out of business
d. Lower their prices
30. Mergers and acquisitions might result in
a. More competition
b. Smaller companies
c. Increases in consumer demand
d. Inadequate competition
31. Public goods are usually provided by the ____________, not the market
a. Corporations
b. Government
c. Small businesses
d. Partnerships
True or False: Mark “A” if the statement is true and “B” if the statement is false.
32. _____ Market situations that lack one or more of the characteristics of perfect
competition are called imperfect competition.
33. _____ Perfect competition requires a market structure with freedom for firms to enter or
leave the market.
34. _____ The monopolist does not use an equilibrium price to determine prices.
35. _____ Oligopoly is a market structure with one very large firm
36. _____ “Truth in advertising laws” are designed to prevent market failures caused by
inadequate information.
37. _____ The Clayton Antitrust Act was the first significant law against monopolies in the
United States.
38. _____ Non – price competition is the use of advertising, giveaways, and other
promotional campaigns to win customers.
39. _____ An example of a public good is a home computer.
40. _____ Many schools, medical care facilities, and churches operate as nonprofit