Chapter 5
When oil prices fall, what is an independent oil producer most likely to do?
Decrease production
Sole proprietorships account for about 4 percent of total sales in the United States, but they create about what percent of total profits earned by all businesses?
16 percent
Is arbitration or mediation where both parties must except the final decision?
Arbitration
What is one major function of a central bank?
It lends to other banks in times of need.
What is the monetary unit in the US money system?
The Dollar
When a business is in State 1 of the production function, each new worker increases or decreases marginal returns?
increases
What is the main advantage of a sole proprietorship?
Owner gets to keep all of the profit.
What were the two main types of labor unions that dominated the industrial period following the Civil War?
Craft and Industrial Unions
Who is responsible for seizing, selling, or liquidating a bank in danger of collapsing?
Federal Deposit Insurance Corporation
Which function of money is illustrated by a decision to save money in a savings account for the future purchase of a car?
Store of Value
Doubling the price of a chocolate-covered biscuit from $1 to $2 causes the quantity suppplied to triple from 100 to 300. This example illustrates what?
Elastic supply
A partnership in which all partners share responsibility for the management and financial obligations of the business is called a
general partnership
What is a lockout?
Refusal to let employees work until they agree to meet certain demands.
What is one of the most profitable services offered by a bank?
Credit Cards
What is marginal cost?
The extra cost of producing one more unit of output
By providing employee training, a business increases supply without increasing inputs. What factor applies to this example?
Productivity
What is one advantage a partnership has over a sole proprietorship?
better chance at getting a bank loan
Which piece of legislation established the right of unions to have collective bargaining?
Wagner Act of 1935
What bank fee could be charged several times a month and at a great cost consumers who fail to pay attention to details?
Overdraft Fee
Why would a successful business sell its model as a franchise?
It can increase profitability through the franchise payment and royalty fees
According to the production function, why would a business choose to suspend additional hiring in Stage II?
The business is experiencing negative marginal returns.
What advantages do corporations have over sole proprietorships and partnerships?
Limited liability and ease of raising financial capital
What type of union does not require union membership but does require the payment of dues to finance collective bargaining efforts that benefit all workers at the business?
Agency Shop
With the creation of the National Banking System, privately owned national banks, chartered by the deferral government, issued national bank notes backed by
Union government bonds
What does the term glass ceiling mean?
Discrimination prevents women and people of color from advancing in a career path