| assets accounting profit () big business economic profit ( ) total revenue marginal cost () total cost merger limited-liability company corporation excess capacity cost of capital unit cost labor cost stock prices | unlimited liability depreciation rate normal profit limited liability sole proprietorship partnership () liability entrepreneurship entrepreneurial ability plant joint venture firm stock bond structures net investment work in process |
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13. What is the difference between a plant and a firm? Between a firm and an industry?
14. What are the principal advantages and disadvantages of each type of the three legal forms of business organization?
15. Why can the distinction between fixed and variable costs be made in the short run?
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6. Five people own equal shares in a partnership. Unlimited liability holds that each of those five people is responsible for:
a) 20 percent of the partnership debts, up to the amount he or she has invested in the business:
b) 20 percents of the partnerships debts, no matter how large the amount;
c) 100 percent of the partnerships debts, no matter how large the amount;
d) a percentage of the partnerships debts, determined by initial the ownership share;
e) none of the partnerships debts.
7. The term,,limited liability is frequently used in enumerating the characteristics of a corporation. It means that:
a) any officer of the corporation is strictly limited in his or her ability to speak for the corporation and commit it to any liability;
b) once shareholders have paid for their stock, they have no further financial obligations, regardless of how much trouble the corporation gets into;
c) the corporations liability to pay dividends to its stockholders is a limited one, since it need pay them only if it has earned a profit;
d) there are certain obligations which a corporation can legally refuse to pay;
e) the corporation has only a limited obligation to meet claims made by any single person or firm against it.
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