Torrie Is Thinking of Starting Up a Small Business Selling

question 136

Multiple Choice

Torrie is thinking of starting up a small business selling hand-painted wine glasses.She asks her sister,Lisette,if she'd like to join her in setting up a partnership to start the business.What is one disadvantage in joining the partnership that Lisette should consider?

• A)Lisette should realize that her profits in the partnership will always be less than Torrie's profits,since Torrie had the idea to start the business.
• B)Lisette should realize that,as an owner of the business,she will be personally responsible for the debts of the business.
• C)Lisette should realize that only Torrie will be allowed to own stock in the business as the founding partner.
• D)Lisette should realize that Torrie will have complete control over the business because it was her idea.

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Definitions:

Political Bias

A preference or inclination that influences judgment or decision-making, favoring or disfavoring certain political parties or ideologies.

Public Bureaucracies

Organizations within the public sector governed by a fixed set of rules and structured hierarchically, tasked with implementing government policies.

Public Choice Theorists

Economists and political scientists who study how public decisions are made, applying theories and methods of economics to analyze political behavior and decision-making.

Market System Failure

An economic situation where the allocation of goods and services by a free market is not efficient, often justifying government intervention.