unit 4 exam Flashcards
The inverse relationship between the price of a product and the quantity that consumers will buy is known as the…. A: The Law of Demand
B: The Principle of Fair Pricing
C: The theory of efficient production
D: The concept of diminishing returns)
The Law of Demand
In a pure/perfect competition market, the number of businesses in the market is….. A: Restrained
B: Few
C: High
D: One
High
All of the following are examples of the advantages of sole proprietorship EXCEPT… A: Unlimited liability
B: Pass-through status
C: Ease of set up
D: Ease of exiting the market
Unlimited liability
What is a significant disadvantage of a General Partnership?
A: Partners have limited decision making power
B: Double taxation
C: Unlimited personal liability for business debts
D: Difficulty in dissolving the partnership
Unlimited personal liability for business debts
A company with a “right to work” law in place is facing challenges with union membership. Some workers are members of the union, while others choose not to join. However, everyone must still pay union dues. Which type of workplace arrangement is most likely described in this scenario? A: Closed Shop
B: Modified Shop
C: Agency Shop
D: Union Shop
Agency Shop
Which of the following is a key advantage of a Sole Proprietorship? A: Limited liability protection
B: Ease of formation and control
C: Ability to raise capital easily
D: Tax benefits from pass-through taxation
Ease of formation and control
True or False: Pure competition markets are easy to enter and easy to exit.
True
Which is a disadvantage of a Sole Proprietorship? A: Limited control over decision making
B: Ease of formation and control
C: Double taxation
D: Unlimited personal liability
Unlimited personal liability
In monopolistic competitions, there are… A: Only one company
B: A small number of companies
C: Many different companies
D: None of the above
Many different companies
True or False: A closed shop allows for both union and non-union workers.
False
Scenario: A group of workers in a factory negotiate with their employer for higher wages. The employer refuses to meet their demands, and the workers vote to go on strike. What action would the workers likely take to publicly demonstrate their discontent during the strike?
A: Start a boycott of the company’s products
B: Create a picket line outside the factory to protest
C: Join an independent union unrelated to their workplace
D: Immediately file a lawsuit against the employer
Create a picket line outside the factory to protest
In a Limited Liability Partnership (LLP), which of the following is true? A: Partners are personally liable for business debts
B: Partners share profits and losses equally
C: Partners are protected from personal liability for certain business obligations
D: LLPs are taxed as corporations
Partners are protected from personal liability for certain business obligations
What is an independent union? A: A union that is affiliated with a national or international labor organization
B: A union that operates without being connected to any larger union federation or organization
C: A union that represents only government employees
D: A union that only focuses on a single industry, such as healthcare/transportation
A union that operates without being connected to any larger union federation or organization
Owners of corporations have _____ liability. A: Personal
B: Unlimited
C: Free
D: Limited
limited
Which of the following is a disadvantage of a Corporation? A: No ability to raise capital
B: Limited personal liability
C: Double taxation (corporate and individual)
D: Difficulty in transferring ownership
Double taxation
Boycotting involves…. A: Picketing in front of a business
B: Sit-ins at work
C: Lockouts preventing employees from working
D: Refusing to buy products from a business
Refusing to buy products from a business
Scenario: A retail company decides to implement a “union shop” policy, requiring all new employees to join the union within 30 days of being hired. How would this policy impact employees? A: All employees must join the union before they are hired
B: Employees must pay union dues but are not required to join the union
C: Employees are only allowed to join the union if they are invited
D: All employees must join the union within 30 days after starting their job
All employees must join the union within 30-days after starting their job
In a pure market economy, prices are generally determined by…A: The people who produce and sell goods
B: The government officials to set prices
C: The exchanges between buyers and sellers
D: The costs of transporting goods to consumers
The exchanges between buyers and sellers
What is one of the primary advantages of forming a Corporation? A: Pass-through taxation
B: Limited liability for owners (shareholders)
C: Complete control by the owner
D: Simple tax structure
Limited liability for owners
The market equilibrium price is the price at which… A: Surpluses depress the number of goods supplied
B: Shortages and surpluses will have no effect on the market
C: The government will not intervene in the market
D: The quantity demanded is the same as the quantity supplied
The quantity demanded is the same as the quantity supplied
True or False: A price that both buyers and sellers can agree on is called the market clearing price.
True
Which of the following is a major disadvantage of a Limited Liability Partnership? A: Difficulty in establishing the partnership agreement
B: Unlimited liability for partners
C: Limited ability to raise capital
D: Complex and costly to form
Limited ability to raise capital
By definition, a Monopoly is…A: Illegal
B: A single seller of a unique product
C: A cartel controlling a market
D: None of these
A single seller of a unique product
An example of a legal Monopoly in the US is…
A: DeBeers
B: Oil cartels
C: A government-regulated monopoly providing an essential service
D: Radical
A government-regulated Monopoly providing an essential service
True or False: The only goal of labor unions is higher wages.
False
Which of the following is a disadvantage of a Nonprofit Organization? A: Profits must be reinvested in the organization
B: The organization can be sued for debts
C: Limited access to donations
D: No tax-exempt status for charitable donations
Profits must be reinvested in the organization
Scenario: The employees of a tech company decides to form their own independent union, apart from any national or international union organizations. What is the main benefit for the employees of forming an independent union rather than joining a larger, affiliated union? A: They have access to a larger pool of financial resources and legal support
B: They can negotiate terms that are more specific to their industry and workplace
C: They can receive automatic raises based on national standards
D: They can avoid paying union dues altogether
They can negotiate terms that are more specific to their industry and workplace
True or False: A partnership can only be formed by two people.
False
Which is an advantage of a General Partnership? A: Limited liability for each partner
B: Easy to form with minimal paperwork
C: Ability to raise large amounts of capital
D: No requirement to share profits
Easy to form with minimal paperwork
True or False: A Sole proprietorship is subject to double taxation.
False
True or False: Land, Buildings, Capital, Entrepreneurship are the four factors of production.
True
In a Limited partnership…
A: Profits are subject to double taxation
B: One or more partners are not involved in the day-to-day management
C: All partners have unlimited liability
D: None of the above
One or more partners are not involved in the day-to-day management
True or False: All partners are equally active in managing the business in a Limited partnership.
False
Scenario: A group of workers in a factory is unhappy with their wages and working conditions. They decide to organize a picket line outside the factory as a part of their protest. What is the primary purpose of the workers’ picket line? A: To demand that the company immediately accepts their demands
B: To persuade others, like customers/other workers, to support their cause and join the protest
C: To negotiate directly with the company management
D: To gather legal support from external organizations
To persuade others, like customers/other workers, to support their cause and join the protest
Scenario: A local factory has been experiencing safety issues, and the workers are unhappy with their current wages. What might be the first action the workers take to address these concerns?
A: Organize a boycott of the factory’s products
B: Go on strike and stop working
C: Create a picket line outside the factory
D: Form a union and begin collective bargaining
Form a union and begin collective bargaining
A key advantage of a Nonprofit Organization is… A: Ability to generate profits for distribution to owners
B: Tax-exempt status
C: Limited liability for founders
D: Simple formation and low costs
Tax-exempt status
Scenario: A state passes a “right to work” law that prevents employers from requiring union membership as a condition of employment. How might this law impact the power of labor unions in that state? A: It would likely increase union membership by requiring all employees to join the union
B: Lower union membership: letting workers benefit from union representation without joining
C: It would have no effect on union membership
D: It would allow unions to form only in certain industries
Lower union membership: letting workers benefit from union representation without joining
True or False: Oligopoly means that there are only a few firms in an industry.
True
Scenario: An employer runs a factory. The factory has a union, but not everyone has to join the union or pay the dues if they choose not to. Which of the following best describes the situation in this factory? A: Workers participate in a “right to work” law that allows them to avoid union dues
B: Workers engage in behavior typical of an “agency shop” arrangement
C: Workers are in violation of their union membership requirement
D: Workers participate in a “closed shop” policy
Workers participate in a “right to work” law that allows them to avoid union dues
Scenario: A large retail chain is facing a strike by workers who demand better wages and improved working conditions. The company decides to bring in non-union workers to fill the positions temporarily. Which of the following would most likely happen if the workers in this scenario are participating in a “closed shop”?
A: Non union workers would be hired and begin work
B: The company would be forced to close its doors temporarily
C: Workers could strike, but non-union workers could still be hired without issue
D: Only union workers would be hired, and company couldn’t replace with non-union workers
Only union workers would be hired, and company couldn’t replace with non-union workers
