Co-operatives and Merit Goods
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Questions and Answers

What is a major disadvantage of a sole proprietorship?

  • Unlimited liability (correct)
  • Limited liability
  • Difficulty in raising capital
  • Difficulty in making decisions

    • In a partnership, how are profits typically divided?

  • Equally between partners (correct)
  • Based on individual contributions
  • Based on experience
  • Based on seniority

    • What is a key advantage of a private limited company?

  • No requirement for external auditing
  • Limited liability (correct)
  • Unlimited liability
  • No need for a board of directors

    • What happens when a partner leaves a partnership?

    <p>The partnership is automatically dissolved</p> Signup and view all the answers

    Who owns a private limited company?

    <p>The shareholders</p> Signup and view all the answers

    Why might a partnership be suitable for professionals such as surveyors or architects?

    <p>It is more common among professionals</p> Signup and view all the answers

    What is the key characteristic of a co-operative?

    <p>It is a democratically run business where members have shared ownership.</p> Signup and view all the answers

    What is a key benefit for the franchiser in a franchising arrangement?

    <p>The franchiser gets financial returns for little drain on resources.</p> Signup and view all the answers

    What is a key advantage for the franchisee in a franchising arrangement?

    <p>The franchisee benefits from a ready-made business idea.</p> Signup and view all the answers

    What is a key difference between a private limited company and a public limited company?

    <p>A private limited company has limited liability, while a public limited company has unlimited liability.</p> Signup and view all the answers

    What is a key disadvantage for the franchisee in a franchising arrangement?

    <p>The franchisee has to pay significant upfront costs.</p> Signup and view all the answers

    What is a key characteristic of a merit good?

    <p>It is a type of good that is used by the population when needed.</p> Signup and view all the answers

    What is the primary characteristic of a sole proprietorship?

    <p>A single person owning and operating the business</p> Signup and view all the answers

    What is a key disadvantage of sole proprietorship?

    <p>The owner must perform all tasks</p> Signup and view all the answers

    What is the primary advantage of a private limited company over a sole proprietorship?

    <p>Limited liability for owners</p> Signup and view all the answers

    What is the key difference between a public limited company and a private limited company?

    <p>The ability to issue public shares</p> Signup and view all the answers

    What is the primary characteristic of a franchise business model?

    <p>A business model where one party grants another party the right to operate a business</p> Signup and view all the answers

    What is the primary advantage of a partnership over a sole proprietorship?

    <p>Shared ownership and liability</p> Signup and view all the answers

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