Study Guide and Quiz Answers

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1
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What does a wholesaling company do?

A
Sell products to individual consumers
B
Sell products to companies that plan to resell them
C
Manufacture products and sell them to retail companies
D
Transform land into capital
2
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What does a company's customer service department do?

A
Promote the company to new groups of potential customers.
B
Interact with customers after they have purchased the product.
C
Receive payments from customers and handle the company's money.
D
Handle employee-related procedures.
3

Which of the following business ownership structures is the simplest and easiest to set up?

A
A partnership
B
An LLC
C
A sole proprietorship
D
A C corporation
4

A company that builds houses and a company that makes cars are part of the __________ industry.

A
Retailing
B
Extractive
C
Wholesaling
D
Manufacturing
5

Which of the following business ownership structures offers the best liability protection but higher taxes?

A
A nonprofit corporation
B
A C corporation
C
A partnership
D
A sole proprietorship
6

Which of the following types of business ownership has the advantages of pass-through taxation and liability protection?

A
A sole proprietorship
B
An LLC
C
A C corporation
D
A partnership
7

Which of the following describes a saturated market?

A
The prices of competitors are very high.
B
Many people want this product and haven't purchased it yet.
C
Most potential buyers have not heard of the product and don't know it exists.
D
Most potential buyers already have a product that satisfies this need or want.
8

Which of the following types of business ownership has the highest personal liability risk?

A
A partnership
B
A sole proprietorship
C
A C corporation
D
An LLC
9

A company is usually unable to take advantage of economies of scale during the __________ stage of the product life cycle.

A
Saturation
B
Introduction
C
Growth
D
Maturity
10

A company that is organized by function will group its employees into teams based on what?

A
The type of work they do
B
The product they make
C
The location or branch they work at
D
The type of customer they serve

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