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Economics Unit Test
Sections 7.1 and 3.1
Question | Answer |
---|---|
form of business organization recognized by law as a separate legal entity having all the rights of an individual | corporation |
business that is jointly owned by two or more persons | partnership |
acts for the stockholders to set policies, make major decisions for stockholders, and chooses a professional management team | Board of Directors |
a firm legally ceases to exist when an owner dies, quits, or sells ownership of the business | limited life |
Certificates that represent money loaned to corporations (IOUs) | Bonds |
Ownership certificates in a corporation (firm) | Stock |
A business owned an run by one person | sole proprietorship |
Requirement that on owner is personally and fully responsible for all losses and debts of the business | unlimited liability |
A check that transfers a portion of the corporate earnings to a stockholder | dividend |
Market structure with only one seller of a product | monopoly |
Theoretical situation in which well-informed, independent buyers and sellers exchange identical products | perfect competition |
Philosophy that government should not interfere with business activities | laissez-faire |
Market situation in which costs are minimized because a single firm produces the product | natural monopoly |
Agreeing to pay the same or similar prices for a product | price-fixing |
Real or imagined differences between competing products | product differentiation |
Market situation in which a few very large sellers dominate the industry | oligopoly |