The document is a quiz on business organizations from a module 3 textbook. It contains 10 multiple choice questions that test understanding of different types of business organizations and structures in the US: 1) The most common form is a sole proprietorship, owned and run by one person. 2) A partnership is a business jointly owned by two or more people and is less common than sole proprietorships. 3) A corporation allows for the issuing of stock and paying of dividends to stockholders, who have a say in company operations. 4) Businesses can expand through mergers, a combination of two or more businesses into a single firm.

1. Business Organizations Module 3 Quiz When you think you know the answer click on the screen and the answer will appear. Click to start

2. Question: The most common form of business organization in the United States is the __________, a business owned and run by one person. A) corporation B) partnership C) franchise D) sole proprietorship Answer is D: Sole proprietorship is the most form of business organization and provides one fifth of the net income of business in the United States.

3. Question: A __________ is a business jointly owned by two or more persons. This is the least numerous form of business organization, accounting for the smallest proportion of sales and net income. A) corporation B) partnership C) multinational D) proprietorship Answer is B: Partnerships are easy to form, attract financial capital, human resources and promotes diversity of talents within the organization.

4. Question: A __________ is a form of business organization recognized by law as a separate legal entity having all the rights of an individual. It has the right to buy and sell property, enter into legal contracts, and sue and be sued. A) proprietorship B) partnership C) corporation D) conglomerate Answer is C: Corporations allow for stocks to be issued and dividends to be paid. The stockholders have a say in the operation of the corporation.

5. Question: A business can expand by engaging in a __________ , a combination of two or more businesses to form a single firm. A) merger B) proprietorship C) partnership D) dissolution Answer is A: Companies seek mergers “to grow faster, to become more efficient, to acquire or deliver better products, to eliminate a rival, or to change its image.” page 69 Chapter 3 Business Organizations

6. Question: A __________ takes place when two or more firms that produce the same kind of product join forces. A) vertical merger B) horizontal merger C) diagonal merger D) circular merger Answer is B: An example of a horizontal merger is when two cell phone companies Cingular and AT&T wireless merged.

7. Question: A __________ takes place when firms involved in different steps of manufacturing or marketing come together. A) vertical merger B) horizontal merger C) diagonal merger D) circular merger Answer is A: “Vertical mergers take place when companies believe that it is important to protect themselves against the loss of suppliers.” page 71, Chapter 3 Business Organizations

8. Question: A conglomerate is a firm that has at least _____ businesses, each making unrelated products, none of which is responsible for a majority of its sales. A) three B) four C) five D) two Answer is B: “Diversification is one of the main reasons for conglomerate mergers. Some firms believe that if they do not ‘put all of their eggs in one basket’ their overall sales and profits will be protected.” page 71 Chapter 3 Business Organizations.

9. Question: When a corporation has offices in many different countries, that corporation is a ______________ corporation. A) international B) global C) multinational D) none of the above Answer is C: “Multinationals are important because they have the ability to move resources, goods and services and financial capital across national borders.” page 72 Chapter 3 Business Organizations

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