easy access to credit
control of decision-making
earning goes directly to the owner
limited liability
unlimited liability
31 answers
The two correct answers representing the benefits enjoyed by sole proprietorships are:
Note: "Limited liability" is not applicable to sole proprietorships, as they generally have unlimited liability. "Easy access to credit" can be challenging for sole proprietorships compared to other business structures.
The true statement about sole proprietorships is:
A sole proprietorship is the simplest form of business organization.
The other options are incorrect because:
The characteristic of general partnerships is:
The partnership has limited life.
General partnerships do indeed have limited life, meaning the partnership can dissolve if a partner leaves, dies, or becomes incapacitated.
To clarify the other options:
The primary responsibility of the shareholders of a corporation is:
Electing a board of directors.
Shareholders typically have the right to vote on key matters, including the election of board members, who are responsible for overseeing the management of the corporation. While shareholders can influence management indirectly by electing the board, they do not usually engage in daily operations or directly oversee production.
The statement that must be true for a business designated as 501(c)(3) is:
The business has federal tax exemptions.
A 501(c)(3) designation indicates that the organization is recognized by the Internal Revenue Service (IRS) as a tax-exempt non-profit entity, which allows it to avoid federal income tax and, in many cases, state and local taxes as well. This designation does not necessarily mean that the business does not earn profits, as non-profits can still generate revenue; however, they must use any profits for their charitable purposes. Whether the organization is a public charity or a private foundation depends on specific criteria, and it is not automatically determined by the 501(c)(3) designation alone.
The two correct answers representing the benefits franchisees enjoy over other small business owners are:
Franchises benefit from the successful marketing provided by franchisors. - Franchisors often have established brand recognition and provide marketing support to their franchisees, helping them attract customers more effectively than independent small businesses may be able to.
Franchises have a lower 5-year failure rate than other small businesses. - Generally, franchises tend to have lower failure rates compared to independent small businesses because they benefit from an established business model, brand recognition, and support from the franchisor.
The other options are not necessarily true for franchises compared to other small businesses. Franchises may not always have lower start-up costs, more control over products and services, or lower operating costs compared to independent businesses.
The correct explanation for the relatively high wages earned by certain medical professionals, like nurse practitioners and physicians, is:
The training and certification required for these professions lead to a relatively low quantity of labor supplied at any given wage.
This means that due to the extensive education, training, and certification requirements, the number of qualified professionals entering the field is relatively low compared to the demand for their services. As a result, the limited supply of these skilled professionals contributes to higher wages in the medical field.
The correct influence on wages and employment within the labor market, given that more individuals are entering the labor market to become doctors due to the significant increase in wages, is:
The market equilibrium wage will decrease, and the equilibrium quantity of labor will increase.
As more individuals enter the profession of medicine, the supply of doctors increases. If the supply increases while demand remains constant, the equilibrium wage is likely to decrease. However, the total quantity of labor (number of doctors) in the market will increase. Thus, the correct option reflects the increase in the quantity of labor and the expected decrease in the equilibrium wage due to increased supply.
In arbitration, leaders of the labor union and the representatives of company management agree to:
to bring a third party into their negotiations who has the ability to make binding decisions.
In this context, arbitration involves a neutral third party (the arbitrator) who listens to both sides and makes a decision that is binding on both the union and management. This is different from mediation, where the third party helps facilitate negotiations but does not have the authority to impose a decision.
The statement that describes the primary difference between craft and industrial unions is:
Workers of a particular trade, not an entire industry, form a craft union.
Craft unions are typically composed of skilled workers who perform a specific trade (such as electricians or plumbers), while industrial unions include all workers within a particular industry, regardless of their specific job or skill level (such as all workers in the automobile manufacturing industry).
The correct explanation for how hiring an additional worker could lead to an increase in human capital is:
Hiring an additional worker could lead to an increase in human capital if the worker were to bring new skills and experience that can be taught to other workers.
This highlights the idea that the new worker's existing skills and experiences can benefit the organization by transferring knowledge and expertise to other employees, thereby increasing the overall human capital of the workforce.
When considering business partnerships, it's essential to understand the differences between general partnerships, limited partnerships, and limited liability partnerships, as each structure has its distinct characteristics, benefits, and potential drawbacks. Here’s a comparison along with reasons prospective partners might choose each form:
Reasons for Choosing a General Partnership:
Reasons for Choosing a Limited Partnership:
Reasons for Choosing a Limited Liability Partnership:
In conclusion, the choice between general, limited, and limited liability partnerships depends on the level of control, liability, investment, and involvement desired by the prospective partners. General partnerships are favored for simplicity and shared management, limited partnerships attract those wishing to invest with limited risk, and limited liability partnerships provide a balance of active involvement with reduced personal liability for professionals. Each structure has its unique advantages that can cater to different business needs and partner arrangements.
Occupations that have a high quantity of qualified providers relative to the level of demand for labor are likely to experience the lowest wages, as an oversupply of workers in that field leads to decreased competition for jobs and drives wages down. Conversely, when there are many qualified candidates but limited jobs available, the abundance of labor can suppress wage levels even further.
Engineers are classified as skilled labor due to the specialized education, training, and technical expertise required for their roles. As a result, they typically command high wages, reflecting the demand for their advanced skills and the relatively lower supply of qualified professionals in the field.
The learning effect refers to the principle that as workers gain experience and skills in a particular job, their productivity improves, which can lead to higher wages over time. For example, a software developer may start with a lower salary, but as they complete more projects and acquire new programming languages and technologies, their increased expertise can result in promotions and significantly higher earnings.
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