Chapter 8 Assessment

Chapter Summary

A summary of major ideas in Chapter 8 appears below. See also the Guide to the Essentials of Economics, which provides additional review and test practice of key concepts in Chapter 8.

• Section 1 Sole Proprietorships (pp. 185–188)

  Sole proprietorships are the most common form of business in the United States. They are easy to establish and offer owners both the benefits and drawbacks that come with full control of the business.

• Section 2 Partnerships (pp. 190–193)

  Partnerships let individuals pool their resources and share responsibility in the forming and running of a business. Three types of partnerships are the general partnership, the limited partnership, and the limited liability partnership.

• Section 3 Corporations, Mergers, and Multinationals (pp. 195–200)

  Corporations are complex business organizations that can be owned by a few or a great many individuals. Mergers combine corporations in various ways to form even larger businesses. Some corporate enterprises, the multinationals, span the globe.

• Section 4 Other Organizations (pp. 201–204)

  Business franchises are business organizations that give business owners support from a parent company. Other types of organizations serve to aid business owners, consumers, producers, industries, workers, or society at large. Many operate as nonprofit organizations.

Key Terms

Match the following definitions with the terms listed below. You will not use all of the terms.

• liability
• corporation
• conglomerate
• general partnership
• sole proprietorship
• vertical merger
• limited partnership
• royalties
• nonprofit organization
• consumer cooperative

1. the combination of two or more firms involved in different stages of producing the same good or service
2. the legally bound obligation to pay debts
3. a legal entity owned by individual stockholders
4. a business owned and managed by a single individual
5. a retail outlet owned and operated by consumers
6. a business combination merging more than three businesses that make unrelated products
7. share of earnings given as payment
8. a form of partnership in which only one partner is required to be a general partner

Using Graphic Organizers

9. On a separate sheet of paper, copy the flowchart below. Use the flowchart to organize information about how a business might grow. Complete the flowchart by writing descriptions and examples for each cell in the chart. You may add cells to the chart.

   

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