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5 Advantages of a sole proprietorship:
- Ease of start up
- Relatively few regulations
- Sole receiver of profit
- Full control
- Easy to discontinue
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2 Disadvantages of a sole proprietorship:
- Unlimited personal liability
- Lack of permanence
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3 Types of partnerships:
- 1. general partnership
- 2. Limited partnerships
- 3. Limited liability partnership
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3 Advantages in Partnerships:
- 1. Ease of start-up
- 2. Shared decision making and specialization
- 3. Larger pool of capital
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2 Disadvantages of Partnerships:
- 1. Unlimited liability
- 2. Potential for conflict
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2 types of Corporations:
- 1. Closely held
- 2. Publicly Held
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4 Advantages of Incorporation:
- 1. Limited Liability
- 2. Transferable ownership
- 3. Ability to attract capital
- 4. Long life
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4 Disadvantages of Incorporation:
- 1. Expense and difficulty of start-up
- 2. Double taxation
- 3. Potential loss of control by the founders
- 4. More legal requirments and regulations
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Name and explain the 3 types of Corporate Combonations:
- 1. Horizontal Mergers: when you join 2 or more firms competing in the same market with the same good or service. Ex: 2 automaker, Chrysler Corporation and Daimler-Benz, merged to form DaimlerChrysler in 1998.
2. Vertical Mergers: when you join 2 or more firms involved in different stages of producing the same good or service. They control all phases of production, rather than rely on the goods or services of outside suppliers. 3. Conglomerates: when firms buy other companies that produce totally unrelated goods or services. Like Johnson and Johnson.
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What is a Multinational Corporation? Give an example.
A large corporation that produces and sells its goods and services throughout the world. Ex: McDonalds.
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Advantages of Multinationals:
- Provide jobs and products through the world
- Spread new technology and production methods
- Jobs raise standard of living
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Disadvantages of Multinationals:
- Negatively influence culture and politics in the countries in which they operate
- The wages are low
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6 Advantages of Franchises:
- 1. Built in reputation
- 2. Management training and support
- 3. Standardized quality
- 4. national advertising program
- 5. financial assisstance
- 6. centralized buying power
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4 Disadvantages of Franchises:
- 1. high franchising fees and royalties
- 2. strict operating standards
- 3. purchase restrictions
- 4. limited product line
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3 Categories of Cooperative Organizations:
- 1. Consumer Cooperatives
- 2. Service Cooperatives
- 3. Producer Cooperatives
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What is a Nonprofit Organization? Give 3 examples.
Institution that functions much like a business, but does not operate for the purpose of generating profits. Ex: Hospitals, museums, and YMCA.
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What are professional organizations?
Nonprofit organizations that works to improve the image, working conditions, and skill levels of people in particular occupations. Ex: The American Medical association(PO) opposes advertising. It believes doctors present a less professional, authoritive, and caring image if they advertise for patients.
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What are business associations?
Nonprofit organization that promotes collective business interests for a city, state, etc., or for a group of similar businesses.
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3 requirements for the employed:
- Worked for 1hr for pay in the past week
- Worked 1hr or more but were unpayed in a family business.
- Held a job but didn't work to do vacation, illness, labor disputes, or bad weather
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2 Requirements for the Unemployed:
- Temporarily out of work
- They are not looking for a job but have looked for one in the past 4 weeks
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What were the historical trends from the Bureau of Labor Stistics?
The labor force in relation to U.S. population increased from 59.2% in 1950 to 66.6% in 2003 to 68% in 2010
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