Econ Chapter 8 Guided Reading
Define the following terms from chapter 8
Business Organization
Sole Proprietorship
Business License
Zoning Law
Liability
Fringe Benefit
Partnership
General Partnership
Limited Partnership
Limited Liability Partnership
Articles of Partnership
Uniform Partnership Act
Assets
Corporation
Stock
Closely Held Corporation
Publically Held Corporation
Bond
Certificate of Incorporation
Dividend
Horizontal Merger
Vertical Merger
Conglomerate
Multinational Corporation
Business Franchise
Royalty
Cooperative
Consumer Cooperative
Service Cooperative
Producer Cooperative
Nonprofit Organization
Professional Organization
Business Association
Trade Association
SECTION 1
1. What is the most popular form of business organization in the United States?
2. What percentage of businesses in the United States are sole proprietorships?
3. List and explain the five advantages of a sole proprietorship
a.
b.
c.
d.
e.
4. Many entrepreneurs start by creating a sole proprietorship. List the
characteristics of the entrepreneurial spirit listed in figure 8.1 on page 186.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
5. List and explain the three disadvantages of a sole proprietorship
a.
b.
SECTION 2
6. Explain the three different types of partnerships
a.
b.
c.
7. List and explain the 4 advantages of a partnership
a.
b.
c.
d.
8. List and explain the two disadvantages of a partnership
a.
b.
9. How are limited liability partnerships different than general partnerships?
10. What are the items covered under the UPA?
11. Explain the difference between a closely held corporation and a publically
held corporation.
SECTION 3
12. List the four advantages of an incorporation
a.
b.
c.
13. Explain the difference between a stock and a bond.
14. List and explain the three disadvantages of an incorporation
a.
b.
c.
15. Draw the corporate structure in the blank space below
16. Draw and explain a horizontal merger
17. Draw and explain a vertical merger
18. Draw and explain a conglomerate
19. Explain the advantages and disadvantages of a multinational corporation.
Rewrite the following sentences to make them correct.
20. Companies in the same business might form vertical mergers.
21. Multinational corporations usually headquarter in several countries.
22. If you buy stocks, you are not part owner of the company.
23. Corporate bonds pay dividends.
24. Dividends represent all of the corporate profits.
25. The federal government issues a company’s certificate of incorporation.
26. A conglomerate merges companies that make related products.
27. Publically held corporations sell stock on the Securities and Exchange
Commission.
SECTION 4
28. List the advantages of a franchise
a.
b.
c.
d.
e.
29. List the disadvantages of a franchise
a.
b.
c.
d.
30. List, explain , AND GIVE AN EXAMPLE the four types of non-profit
organizations
a.
b.
c.
d.
31. List, explain, AND GIVE AN EXAMPLE of the three types of cooperatives
a.
b.
c.