Chapter Five: Business and Labor

Question 1

Sole Proprietorship

Answer 1

An unincorporated business that has just one owner who pays personal income tax on profits earned from the business. (ex: grocery store, repair shop, beauty parlor)

Question 2

Advantages of Sole Proprietorship

Answer 2

-Ease of Start-up
-Relatively few regulations
-Sole receiver of profits
-Full control
-Easy to discontinue

Question 3

Disadvantages of Sole Proprietorship

Answer 3

-Unlimited personal liability
-Limited access to resources
-Lack of permanence

Question 4

Partnerships

Answer 4

A type of business that two or more individuals own.

Question 5

Two main types of Partnerships

Answer 5

-General: Working arrangements defined by a written agreement

-Limited: One partner is liable for the debt, while the other is not.

Question 6

Advantages of a Partnership

Answer 6

-Ease of Start-up
-Shared decision-making and specialization
-Large pool of capital
-Taxation

Question 7

Disadvantage of a Partnership

Answer 7

-Unlimited liability
-Potential for conflict

Question 8

Corporations

Answer 8

A legal entity that is separate and distinct from its owners.

Question 9

Advantages of a Corporation

Answer 9

-Limited liability
-Transferable ownership
-Ability to attract capital
-Long life

Question 10

Disadvantages of a Corporation

Answer 10

-Difficulty and expense of start-up
-Double taxation
-Loss of control
-More regulations

Question 11

Business Franchise

Answer 11

A business in which the operator pays a mixture of upfront and ongoing fees in order to license the brand name and supporting resources of a parent company.

Question 12

Advantages of a Franchise

Answer 12

-Management training and support
-Standardized quality
-National advertising
-Financial assistance
-Centralized buying power

Question 13

Disadvantages of a Franchise

Answer 13

-High franchising fees and royalties
-Strict operating standards
-Purchasing restrictions
-Limited product line

Question 14

Vertical Integration

Answer 14

A strategy that allows a company to streamline its operation by taking direct ownership of various stages of its production process rather than relying on external contractors or suppliers.

Question 15

Horizontal Acquisition

Answer 15

A new combined entity when one company acquires another company in the same industry and works at the same production stage.

Question 16

Conglomerate

Answer 16

A corporation made up of several different independent businesses.

Question 17

Multinational Corporation

Answer 17

A company that has business operations in at least one country other than its home country.

Question 18

Cooperative Organizations

Answer 18

-Consumer
-Service
-Producer

Question 19

Consumer Cooperative

Answer 19

The primary purpose is to procure and distribute commodities to members and non-members.

Question 20

Producer Cooperative

Answer 20

Undertakes joint production whether agriculture or industrial

Question 21

Service Cooperative

Answer 21

Engages in medical and dental care, hospitalization, insurance, housing, labor, electric lights and power, communication and other sources.

Question 22

Non-Profits

Answer 22

-Professional organizations
-Business Organizations
-Trade associations
-Labor Unions

Question 23

Employment

Answer 23

When all available labor resources are being used in the most efficient way possible.

Question 24

Employed if you are 16 and older and meet one of the following:

Answer 24

-Work at least one hour for pay in the last week
-Work 15 hours or move without pay in a family store or farm, or
-Held jobs but did not work due to illness, vacation, labor disputes, or bad weather.

Question 25

Discourage Workers

Answer 25

Gave up looking for a job

Question 26

Unemployment

Answer 26

A situation where a person actively searches for employment buy is unable to find work. Unemployment to is considered to be a key measure of the health of the economy.

Question 27

Bureau of Labor Statistics

Answer 27

-Produces special reports on developments in various sectors of the job market in a series of career outlook articles
-Collect and analyze data, and provide the resulting economic information to the public

Question 28

Occupational Trends

Answer 28

-Changing economy
-Fewer goods and more services
-Effects of international competition

Question 29

Outsourcing

Answer 29

The business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company’s own employees and staff.

Question 30

Offshoring

Answer 30

The transferring activities or ownership of a complete business process to a different country from the country (or countries) where the company receiving the services is located. Mostly done for reduced costs, less rules & regulation, and tax benefits

Question 31

Changing Labor Forces

Answer 31

-College graduates
-Women at work
-Temporary workers
-Guest workers

Question 32

Labor Demand

Answer 32

-Productivity
-Labor supply
-Equilibrium wage

Question 33

Wage and Skill Levels

Answer 33

-Unskilled Labor
-Semi-Skilled Labor
-Skilled Labor
-Professional Labor

Question 34

Wage Discrimination

Answer 34

-Laws
-Women
-Minorities

Question 35

Featherbedding

Answer 35

Unions force firms to hire more workers than are required or to impose work rules that reduce output per worker. The result is on increase in the demand for labor.

Question 36

Labor Unions

Answer 36

An organization formed by workers in a particular trade, industry, or company to improve pay, benefits, and working conditions

Question 37

The Labor Movement

Answer 37

-Strikes
-Employer resistance
-Congressional protections

Question 38

Decline of the Labor Movement

Answer 38

-Right-To-Work Laws
-Loss of traditional strongholds

Question 39

Collective Bargaining

Answer 39

-Wages and benefits
-Working conditions
-Job security

Question 40

Strikes and Settlement

Answer 40

-Mediation
-Arbitration