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Quiz 1 Answers
True/False (Write true or false for each
statement.)
True 1. Individually owned, partnerships, corporations,
cooperative corporations, and LLC's help to provide our
communities with needed goods and services.
False 2. Cooperatives eliminate the profit motive among
members.
False 3. If an individually owned business firm were to
fail, it would not be possible for the owner to lose more than
he/she invested in the business.
True 4. Cooperatives are owned and controlled by
members.
False 5. In a cooperative, capital is generally supplied by
investors seeking profits.
True 6. In an investor-oriented corporation, profits
are shared in direct relation to the amount of stock owned.
True 7. In partnerships, income is distributed among
partners according to the percentage of business each one owns.
True 8. In a cooperative, net earnings are returned
to members based on how much the member patronized the
cooperative.
True 9. Both the investor-oriented corporation and
the cooperative corporation must be legally chartered to do business.
True 10. Cooperatives are common in such areas of business
as: insurance, credit, agriculture, consumer goods, and rural
electricity.
11. Our American system of business
is often described as the free or private
enterprise system.
12. List and briefly explain the
four basic principles of the American business system.
a) Freedom of choice
b) Private property rights
c) Profit motives of owner
d) Owner control
13. List the four basic forms of business
in America.
a) Individually owned
b) Partnership
c) Corporation
14. Corporations are divided into
two types. What are those two types?
a) Investor-owned corporations
b) Cooperative corporations
15. What hybrid business structure
is becoming increasingly common?
The limited liability company
16. Name a cooperative in your hometown,
or a nearby town. (Open group discussion question - select some students to
provide their
answer and discuss.)
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