Economics Principles & Practices

Chapter 3: Business Organizations

Self-Check Quizzes

1
The most common form of business organization in the United States is the __________, a business owned and run by one person.
A)corporation
B)partnership
C)franchise
D)sole proprietorship
2
A __________ is a business jointly owned by two or more persons. This is the least numerous form of business organization, accounting for the smallest proportion of sales and net income.
A)corporation
B)partnership
C)multinational
D)proprietorship
3
A __________ is a form of business organization recognized by law as a separate legal entity having all the rights of an individual. It has the right to buy and sell property, enter into legal contracts, and sue and be sued.
A)proprietorship
B)partnership
C)corporation
D)conglomerate
4
A business can expand by engaging in a __________, a combination of two or more businesses to form a single firm.
A)merger
B)proprietorship
C)partnership
D)dissolution
5
A __________ takes place when two or more firms that produce the same kind of product join forces.
A)vertical merger
B)horizontal merger
C)diagonal merger
D)circular merger
6
A __________ takes place when firms involved in different steps of manufacturing or marketing come together.
A)vertical merger
B)horizontal merger
C)diagonal merger
D)circular merger
7
A __________ operates in a businesslike way to promote the collective interests of its members rather than to seek financial gain for its owners.
A)proprietorship
B)corporation
C)multinational
D)nonprofit organization
8
The Tennessee Valley Authority is an example of ____________.
A)government's direct role in the economy
B)government's indirect role in the economy
C)a vertical merger
D)a horizontal merger
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