Economics Practice Test – Business Organisations

The most important limitation on the partnership as a form of business enterprise is the ______ (JAMB 1988)

A. implication for partners’ liability
B. legal limitation placed on the number of partners
C. difficulties arising from having two co-ordinate heads of a firm
D. fact that each partner regardless of the capital he contributes must have the same voting rights.

A firm is said to be a public Joint Stock Company when it ______ (JAMB 1985) 

A. is owned by the government
B. is operated as a public corporation
C. is operated in a non-democratic fashion
D. sells shares to members of the public and publishes its accounts

A limited liability company is usually owned by ______ (JAMB 1987)

A. an individual     B. a government    C. shareholders   D. two or more partners

Capital provided by individuals to the firm by purchasing stocks is called _____ (JAMB 1990) 

A. debt capital    B. fixed capital     C. circulating capital    D. equity capital

A major difference between a state-owned enterprise and a private enterprise is that the former _____ (JAMB 1990) 

A. is not expected to cover its costs of production while the latter is 
B. ¡s not always expected to maximize profits while the latter is
C. has shareholders while the latter does not
D. has a board of directors while the latter does not