Gov/Econ- Vinson

Unit Four

Business Operations
Complete the following assignment after reading section 1 of chapter 7 of the Economics text:

1. Most of you have (or have had) a job. Does shirking occur where you work? What impact does it
have on your work environment and productivity? What is your boss’s role as a monitor? If you
don’t have a job, tell me what your parents or friends say about their employer/workplace:

Shirking does not occur where I work. As a doordash driver, productivity in my work day is
dependent only on myself. Therefore, nobody else can be lacking in productivity because I work
solo. However, Doordash makes sure that I am not slacking by monitoring me while I dash.
Monitors hire and fire dashers, so by threatening dismissal of anyone who doesn’t accurately
follow guidelines, inadequate dashers and shirking are decreased greatly.

2. Provide a definition for each type of business and list at least two advantages and disadvantages of
each:

Sole Proprietorship- a business owned by one individual that makes all decisions, takes
profits and losses, and is responsible for the debts of that business.

Advantages: Disadvantages:
● Easy to form and dissolve ● Unlimited liability (personal assets may
● Profit is only taxed once (personal be used to pay off debts of the firm)
income tax) ● End with the retirement or death of the
proprietor.

Partnership- a business that is co-owned by two or more individuals who share business
profits and are responsible for debt.

Advantages:
● Ability to specialize (everybody has
different strengths)
● Only have to pay personal income taxes
Disadvantages:
● Unlimited liability (one person can
cause debt, but everyone is held
responsible for them)
● Difference in opinions when decision
making

Corporation- legal entity that conducts business and is owned by stockholders

Advantages: Disadvantages:
● Corporation owners not personally ● Subject to more taxation (corporation
responsible for debts tax and personal income taxes)
● Corporations continue to exist even ●
after owners retire or die
3. During synchronous time we listed some of the businesses we regularly patronize. Put as many as
you can into each of the three categories below (if you don’t have any under “Partnership”, that’s
okay):

Sole Proprietorship Partnership Corporation

- Powells - Amazon
- Vendors at a farmer’s - Coca-Cola
market - Nike
- Dr. Bronner’s - Northface
- Queen Nail Spa - target

4. Most of us do a good deal of businesses with corporations these days. Tell me about one of the
corporations you listed above. Why do you buy from this business? What do you like about their
product/service? Why don’t you buy this product/service from a local sole proprietor?

A corporation from above that I use frequently is Amazon. I shop from amazon because the
products are affordable and it is easier to shop from there, online, than to go by something from a
local sole proprietor. I find amazon products to be less expensive and there is more variety in their
products. Simply put, it is more convenient.

5. What is a franchise, and what are the advantages and disadvantages for the franchisee?

What is it? A contract that allows a person or group to use the name of and sell the
products of a firm. The person or group has to make certain payments and meet
specific requirements.

Advantages: - Allows for national advertising

- Higher success rate

Disadvantages: - Franchiser can fail to provide the financial and training support for the
franchisee
- Franchisee can fail to provide the quality of service expected by the
franchiser

6. Re-read the section titled “What Is the Ethical and Social Responsibility of Business” and tell me
whether you support the Nader view or the Friedman view, and why:

I support the Nadar view, because I believe everybody should be trying to make our world a better
place, and it is wrong to only consider profit when making a contribution to society. In addition, it
is crucial to look out for consumers and make sure that they have all important information about
what they are buying from. Quality of life should absolutely be considered when looking at
business. Lastly, I think business should donate funds to social needs because they often have the
resources and ability to improve a community.