AnswersHSA 26-27 EconomicsEconomic Policy: Influential Theories

Business Structures Answers

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1
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Which type of business is best for Juanita to start?

A
a corporation, because she needs a large investment to get started
B
a sole proprietorship, because she will work alone from home
C
a franchise, because many others will want to start the same business
D
a cooperative, so that she and other translators can work together
2
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Juanita wants to grow her business. Which options does she have? Select all that apply.Juanita could incorporate and try to find investors to help her grow her business.Juanita could remain a sole proprietor and begin a web-based magazine.Juanita could take on a partner, become a partnership, and begin hiring other staff members to take on more translating work.Juanita could buy an existing franchise and change its product to fit her translation skills. Juanita could remain a sole proprietor and incorporate her company.

A
Juanita could incorporate and try to find investors to help her grow her business.
B
Juanita could remain a sole proprietor and begin a web-based magazine.
C
Juanita could take on a partner, become a partnership, and begin hiring other staff members to take on more translating work.
D
Juanita could buy an existing franchise and change its product to fit her translation skills.
E
Juanita could remain a sole proprietor and incorporate her company.
3

What is the best business organization for Annabeth’s new company?

A
a corporation, because she will need financing to get started
B
a sole proprietorship, because the business is small and simple to operate
C
a partnership, because she lacks the skills to make machine parts
D
a cooperative, because local businesses will be her customers
4

What is the most significant challenge Annabeth faces in her business model?

A
Annabeth does not have the skills to make machine parts.
B
Annabeth must raise large amounts of capital to get started.
C
There is no demand for solar panel parts in her community.
D
There is no demand for solar panel parts overseas.
5

Why is a cooperative a good choice for Mark, Emiko, and the other farmers in their area?

A
The farmer with the largest farm will make the decisions for the group.
B
No one will have to pay taxes on their earnings.
C
The farmers can all be member-owners and share in any profits.
D
The cooperative does not have to be registered with the state.
6

Use what you have learned about business organizations to advise Valentino and Eva.Which type of business organization should they consider when setting up their new restaurant?Include at least two reasons for your advice.

Answer:

Valentino and Eva should consider forming a partnership. One reason is that it allows them to pool their financial resources and diverse skills to share the costs and work involved in opening a restaurant. A second reason is that a partnership is relatively easy and inexpensive to form compared to a corporation, and it allows for shared decision-making between the two owners.

7

Which of these ideas did you include in your response? Select all that apply.

A
Valentino and Eva should consider starting a partnership.
B
Valentino and Eva should consider purchasing a franchise.
C
Both owners should consider their needs when choosing a type of business organization.
8

Which of these ideas did you include in your response? Select all that apply.

A
Valentino and Eva should consider starting a partnership.
B
Valentino and Eva should consider purchasing a franchise.
C
Both owners should consider their needs when choosing a type of business organization.

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