Question

1. economic institutions

a. are profit - seeking enterprises.
b. use resources to satisfy the wants and needs of consumers.
c. are formed through merger.
d. are subject to special taxes.

1. which of the following statements is incorrect?

a. most of the business in the united states is carried out by corporations.
b. the most common form of business organization is the sole proprietorship.
c. states can charter corporations.
d. partnerships total mores sales per year than do corporations or proprietorships.

1. which is not one of the business organizations discussed in this chapter?

a. sole proprietorship
b. partnership
c. trust
d. corporation

1. which of the following would make up a vertical merger?

a. coke and pepsi
b. at&t and direct tv
c. us air and american airlines
d. general motors and ford
short answer

1. which letter represents the proper location on the diagram for “ownership shares in a corporation”?
2. which letter on the diagram represents the proper location for “stockholders receive voting rights”?

Explanation:

1. Economic institutions use resources to satisfy consumer wants and needs. They are not just profit - seeking enterprises and not necessarily formed through mergers or subject to special taxes.
2. Partnerships do not total more sales per year than corporations or proprietorships in the US. Corporations usually have higher sales.
3. Trust is not a basic business organization like sole proprietorship, partnership, and corporation.
4. A vertical merger is between firms at different stages of production. AT&T (a service provider) and Direct TV (a content - delivery service) is a vertical merger example. Others are horizontal mergers.
5. Ownership shares in a corporation include both common and preferred stock, so it is in the combined area of X and Z (Y).
6. Only common stockholders have voting rights, so it is in X.

Answer:

1. b
2. d
3. c
4. b
5. Y
6. X