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Econ > Chapter 8 FRQ > Flashcards

Chapter 8 FRQ Flashcards

1
Q

Sole

Proprietorship

A

Business owned and managed by single individual

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2
Q

Examples of sole proprietorships

A

Bakery, hair salon, bike repair

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3
Q

Three advantages of sole proprietorship

A

Easy start up
Sole receiver of profit
Full control

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4
Q

Three disadvantages of sole proprietorship

A

Unlimited personal liability
Limited access to resources
Lack of permanence (limited life)

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5
Q

General partnerships

A

All responsibility equally shared

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6
Q

General partnerships examples

A

Doctors, lawyers, accountants

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7
Q

Limited partnerships

A

Only one partner is required to be general partner

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8
Q

Limited liability partnerships

A

All partners are limited

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9
Q

LLP examples

A

Attorneys, dentists, accountants

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10
Q

Advantages of partnerships

A

Easy start up
Shared decision making
Larger pool of capital
No special taxes

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11
Q

Disadvantages of partnerships

A

Unlimited liability

Potential for conflict

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12
Q

Corporations

A

A legal entity owned by individual stockholders

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13
Q

Advantages of corporation

A

Unlimited liability for owners
Transferable ownership
Ability to attract capital
Long life

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14
Q

Disadvantages of corporations

A

Expense/difficult start up
Double taxation
Potential loss of control by the founders (selling stock)

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15
Q

Multinational corporations

A

Large corporation that produces and sells its goods and services throughout the world

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16
Q

Multinational corporation examples

A

Apple inc
Coco cola
Sony

17
Q

Multinational corporation advantages

A

Provide jobs around world
Provide products
Spread new technology

18
Q

Multinational disadvantages

A

Low wages
Poor working conditions
Bad influence on culture

19
Q

Business franchise

A

Semi independent business that pays fees to a parent company in return for the exclusive right to sell a certain product or service in a given area

20
Q

Business franchise examples

A

Jets, pizza, Starbucks

21
Q

Business franchise advantages

A

Management training and support
Standardized equality
Advertising programs
Financial assistance

22
Q

Business franchise disadvantages

A

High franchise fees and royalties
Strict operating standards
Limited product lines

Econ (18 decks)

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