Economics Ch. 8 and 9 Definitions Quiz

Business Structures and Types

• Sole Proprietorship: An unincorporated business owned by one individual; profits are taxed as personal income. Example: Lemonade stand.

• Partnership: A business association involving two or more people.

• Types of Partnerships:

  • General Partnership: Partners have unlimited liability; personal assets are at risk for business obligations.
  • Limited Partnership: Requires at least one general partner and one limited partner; limited partners have restricted involvement in daily operations. Example: Investor collaborating with a managing partner.
  • Limited Liability Partnership (LLP): Some or all partners have limited liability, protecting them from other partners' misconduct. Example: Partnership among doctors.

Corporate Structures

• Corporation: A distinct legal entity separate from its owners; owned by shareholders. Corporations can enter contracts, borrow money, sue, and pay taxes. Example: Pepsico.

Mergers and Acquisitions

• Vertical Merger: A merger of two companies at different stages of production, creating a final product. Example: Oculus partnering with Samsung for a VR headset.

• Horizontal Merger: Occurs between companies in the same industry, aiming to consolidate resources. Example: ATT merging with DirectTV.

• Conglomerate: A corporation composed of various unrelated businesses. Example: Alphabet Inc.

Global Corporations

• Multinational Corporation: Operates in multiple countries, utilizing international facilities and assets. Example: Apple, designed in the U.S., manufactured in China.

Franchising and Cooperatives

• Franchise: A licensing agreement allowing one party to use another's business model and brand in exchange for fees. Example: McDonald's.

• Cooperatives: Owned and operated for the benefit of members using its services.

Types of Cooperatives

• Consumer Cooperative: Focused on retail for personal goods. Example: Buying an iPhone from Apple.

• Service Cooperative: Provides services to members. Example: Paying someone to wash a car.

• Producer Cooperative: Comprises individuals or businesses that produce goods. Example: A strawberry farm.

Nonprofit Organizations

• Nonprofit Organization: Provides public services and can earn profits, but not primarily for profit-making. No shareholders.

Types of Nonprofit Organizations

• Professional Nonprofits: Organizations related to specific professions. Example: American Medical Association.

• Business Nonprofits: Operate similarly to businesses but with a nonprofit mission.

• Trade Associations: Funded by businesses operating in a specific industry for mutual benefit. Example: Agricultural Transportation Coalition.

• Labor Unions: Organizations that protect workers' rights and interests. Example: United Steel Workers.

Test your knowledge on key concepts from Chapters 8 and 9 of Economics with this flashcard quiz. Covering essential definitions and examples, you will solidify your understanding of various business structures like sole proprietorships and partnerships. Perfect for students looking to reinforce their learning.