The Advantages of the Partnership Form of Business Organization, Compared

question 1

Multiple Choice

The advantages of the partnership form of business organization, compared to corporations, include

• A) Single taxation.
• B) Ease of raising capital.
• C) Mutual agency.
• D) Limited liability.
• E) Difficulty of formation.

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Definitions:

Absolute Advantage

The ability of a party to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources.

Comparative Advantage

The capability of an entity to generate a product or service with a smaller opportunity cost compared to another entity.

Comparative Advantage

The talent of a country or business to create a certain product or service more efficiently, incurring lower opportunity costs than competing entities.

Absolute Advantage

A condition where an entity can produce a good at a lower cost in terms of labor, resources, and time than another entity producing the same good.