Economics Practice Test – Business Organisations

Which of the following is a characteristic of private limited liability company? (JAMB 1986)  

A. Its shares can be sold to the public.
B. The number of shareholders ranges from fifty to one hundred
C. All shareholders have equal powers and responsibilities
D. The number of shareholders ranges from two to fifty.

Which would you NOT consider an advantage of a one-man business? (JAMB 1980) 

A. Freedom of action
B. Limited liability
C. Quick decision-making
D. Personal contact with customers

In the event of a limited liability company going into liquidation each ______ (JAMB 1983) 

A. shareholder may lose the maximum of the amount he has invested
B. shareholder loses nothing
C. shareholder loses everything including his house
D. shareholder’s liability becomes unlimited

The most important advantage of co-operative societies is ______ (JAMB 1986) 

A. their high degree of democracy.
B. the increase in the cost of marketing
C. that members are encouraged to save money
D. the possibility of raising loans for the members

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