Ap Eco Test 5&6

Ap Eco Test 5&6 - * 5&6 TAKE-HOME 5&6 *...

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*** TAKE-HOME *** Test Version: Take-Home, 30 Questions 1. A firm that produces a single product but owns plants in many different stages of the production process-for example, a steel producer that owns iron ore mines and rolling mills-best illustrates a: A) vertically integrated firm. B) multinational corporation. C) virtual corporation. D) conglomerate. 2. A firm comprised of plants or units operating in different industries, say, beer and theme parks, best illustrates a: A) vertically integrated firm. B) multinational corporation. C) multiplant firm. D) conglomerate. 3. The advantages of the corporate form of business include: A) the ability to raise financial capital by selling stocks and bonds. B) the fact that owners are subject to unlimited liability. C) the elimination of the principal-agent problem. D) single taxation of corporate earnings. 4. The corporate form of business enterprise has promoted the development of large-scale business operations because: A) the corporate form of enterprise is in a highly advantageous position to protect itself from the effects of long-run inflation. B) corporations have been able to marshal large amounts of financial capital through the sale of stocks and bonds. C) corporations have been more successful than unincorporated businesses in keeping labor unions out of their plants. D) this legal form of enterprise has been subject to fewer government controls than have proprietorships and partnerships. Thursday, September 24, 2009 Page 1
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5. An owner's liability for the debts of a business is: A) limited in a corporation to the assets of preferred stockholders. B) limited in a corporation to the assets of bondholders. C) limited to the owner's investment in a single proprietorship. D) unlimited in a partnership. 6. Stocks are: A) promises to repay a loan. B) also known as bonds. C) issued by sole proprietorships. D) shares of ownership of a corporation. 7. An S corporation is a: A) form of business organization designed to protect firms from lawsuits by disgruntled stockholders. B)
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Ap Eco Test 5&6 - * 5&6 TAKE-HOME 5&6 *...

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