15 Questions
Which of the following best describes a consumer in a market economy?
An individual who buys products and services for personal use
What is a sole proprietorship?
An individual who takes all the responsibility for a business
What is the main advantage of starting a sole proprietorship?
Ease of start-up
Which type of business structure is separate from its owners and can receive the perks as an individual?
Corporation
What is one advantage of operating a business as a corporation?
Limited liability for shareholders
What is one disadvantage of operating a business as a corporation?
Double taxation
Which type of business structure functions on the premise of not making money, but providing necessary services?
Non-profit
What is the role of the government in a market economy?
To create policies to improve market outcomes
What is an example of a participatory role of the government mentioned in the text?
Regulating education
What is an unintended consequence of government policies?
The creation of the highway system
What is the purpose of the government supervising local cable providers or cell phone providers?
To protect citizens from monopoly situations
Which type of business has virtually no regulations other than industry specific regulations?
Sole proprietorship
What is the term used to describe the legal obligation that must be paid and is usually in the form of debts incurred by the business?
Liability
Which type of business allows for shared decision making and specialization, allowing partners to focus on specific tasks?
Partnership
What happens to a sole proprietorship when the owner dies?
The business dies with them
Test your knowledge on partnership structures and the concept of lack of permanence. Take this quiz to assess your understanding of forming new partnerships when a partner leaves or dies.
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