Question

chapter 8 mastery test a
part a circle the letter of the answer that correctly completes each sentence.

1. venture capitalists provide financial resources in return for —.

a goods b total control c part of the profits d a partnership

1. in a partnership, the partners share —.

a profits b stocks c charters d bonds

1. once a corporation has a charter, it can —.

a limit liability b name partners c tax goods d sell stock

1. the circular flow model shows — in the economy.

a productivity b goods and services c entrepreneurs d exchanges

1. the circular flow model is only one — of how the economy works.

a decision b theory c element d advantage
part b write the correct word from the word bank to complete each sentence.
word bank
technical know - how economy entrepreneurs consumers
corporation marketable partnerships

1. leadership and ideas for the economy are provided by
2. to be successful, an entrepreneur must have a(n) _ idea.
3. because a(n) _ doesnt end when an owner dies, it has unlimited life.
4. the product market involves exchanges between _ and businesses.
5. josé knows how to repair computers. he has the _ for his new business.
6. sole proprietorships and _ are easy to organize.
7. the circular flow model does not show a complete picture of the _

Explanation:

• Question 1: Venture capitalists invest in startups and expect a share of profits as a return on their investment.
• Question 2: In a partnership, partners share the profits of the business.
• Question 3: A corporation with a charter can sell stock to raise capital.
• Question 4: The circular flow model illustrates exchanges (of goods, services, money) in the economy.
• Question 5: The circular flow model is a theory (a simplified representation) of how the economy functions.
• Question 6: Entrepreneurs provide leadership and ideas for the economy.
• Question 7: An entrepreneur needs a marketable (able to be sold/marketed) idea to succeed.
• Question 8: A corporation has unlimited life as it doesn't end with an owner's death.
• Question 9: The product market involves exchanges between consumers (who buy) and businesses (who sell).
• Question 10: Technical know - how refers to the skills (like computer repair) needed for a business.
• Question 11: Sole proprietorships and partnerships are relatively easy to organize compared to corporations.
• Question 12: The circular flow model is a simplified view and doesn't show the entire economy.

Answer:

1. C. part of the profits
2. A. profits
3. D. sell stock
4. D. exchanges
5. B. theory
6. entrepreneurs
7. marketable
8. corporation
9. consumers
10. technical know - how
11. partnerships
12. economy