Questions 1-3
Explain the liabilities that sole proprietorships, partnerships, and corporations have.
Sole Proprietorships and Partnerships have unlimited liability for all debts and obligations. Corporations have limited liability for all debts and responsibilities.
What are the characteristics of sole proprietorships, partnerships, and corporations?
Sole Proprietorships: No special taxes, unlimited liability, easy to manage, 1 person has complete ownership, and it can be difficult to raise capital.
Partnerships: No special taxes, unlimited liability, easy to manage, 2+ people manage and are co-owners, and it can be easier to raise capital compared to sole proprietorships.
Corporations: Many legal rights of an individual, limited liability, more gov't regulations, easy to raise capital through stock/bond sales, and the business can continue despite ownership change.
What is the gov'ts role in the formation of sole proprietorships, partnerships, and corporations?
The government has little role in the formation of sole proprietorships and partnerships, whereas corporations have to get permission from the state.
How does an increase and decrease in productivity affect economic growth?
An increase of productivity affects economic growth through the increase in output of products which is related to potential increase in sales.
A decrease in productivity can affect economic growth due to the decrease in product output which in turn is related to potential decrease in sales.
What are the characteristics of expansionary and recessionary periods during the business cycle?
Expansionary: Low inflation and unemployment, increased productivity and sales.
Recessionary: High inflation and unemployment, decreased productivity and sales.
Explain why economists look at the business cycle.
It shows an observable pattern in the fluctuations of economic activity that is experienced over time. Economists look to the business cycle to show where the economy is in the cycle by looking at the amount of output, employment rate, and prices. This gives economists and idea of whether the economy is in either an expansionary or recessionary period.
What are entrepreneurs?
Entrepreneurs are people that are willing to start a business and take on all the responsibilities.
What kind of information does retail sales give to companies?
Data from retail sales can be used by company leaders to compare worker output to retail sales in order to determine how the business uses capital and labor in order to produce inventory and revenue.
How would new technology in manufacturing affect economic growth?
New technology often results in increased productivity because less labor is needed to create more products, this in turn can lead to economic growth.
What is the importance of gross domestic product to economists?
Gross Domestic Product or GDP is important to economists because it shows the overall value of all goods and services produced within a country during a year. This can show them how the overall economy is doing compared to previous years.
Explain about the kinds of restrictions and regulations new businesses need to think about.
New businesses need to think about local zoning laws, noise limitations, sanitation, safety, and the preservation of historic buildings.
Explain what the costs there are to personal property such as homes, vehicles, and land.
The costs to personal property can be the opportunity cost of what was not purchased. The cost of maintenance on things like vehicles and homes. The potential loss of value when the property is sold.