MGT211 Quiz 2 Set B

Q1. Why are franchises attractive to new entrepreneurs?

1. Limited tax benefits
2. Total independence
3. Brand recognition and business model
4. Government support

Correct answer: Brand recognition and business model

Q2. What is a major advantage of partnerships over sole proprietorships?

1. Less capital
2. Shared resources and skills
3. No registration needed
4. Double taxation

Correct answer: Shared resources and skills

Q3. Which form of business has joint and several liability?

1. Public Company
2. Partnership
3. Cooperative
4. Franchise

Correct answer: Partnership

Q4. Which motivation theory is based on five hierarchical levels?

1. Theory X and Y
2. McClelland’s Theory
3. Maslow’s Hierarchy
4. Herzberg’s Theory

Correct answer: Maslow’s Hierarchy

Q5. A key disadvantage of sole proprietorship is:

1. Excessive legal regulation
2. Complex registration
3. Unlimited liability
4. Low operational flexibility

Correct answer: Unlimited liability

Q6. A firm planning to raise capital through the stock exchange must register as:

1. Private Limited Company
2. Single Member Company
3. Public Limited Company
4. Partnership

Correct answer: Public Limited Company

Q7. Why is a company more credible to banks and investors than a sole proprietorship?

1. Perpetual Succession and formal structure
2. It is unregistered
3. It has fewer rules
4. It is tax-free

Correct answer: Perpetual Succession and formal structure

Q8.

1. Works under a government license
2. Operates under an established brand
3. Has unlimited liability
4. Creates its own brand

Correct answer: Operates under an established brand

Q9. What was the key conclusion of the Hawthorne Studies?

1. Social recognition boosts performance
2. Physical conditions always improve output
3. Good lighting improves productivity
4. Workers are only motivated by wages

Correct answer: Social recognition boosts performance

Q10. If three friends want to start a bakery and share profits and decisions, they should form a:

1. Franchise
2. Company
3. Sole Proprietorship
4. Partnership

Correct answer: Partnership