Question 1

The present value and future value of a loan

Accepted Answer

A) have no relationship. 
B) are connected through compounding. 
C) represent the difference between income flows over time. 
D) are connected through the interest rate. 
A) have no relationship. 
B) are connected through compounding. 
C) represent the difference between income flows over time. 
D) are connected through the interest rate.

Question 2

Firm managers use poison pills to

Accepted Answer

A) make economics losses. 
B) acquire controlling interest in another firm. 
C) make the firm less attractive as a takeover target. 
D) force faster turnover on the board of directors. 
A) make economics losses. 
B) acquire controlling interest in another firm. 
C) make the firm less attractive as a takeover target. 
D) force faster turnover on the board of directors.

Question 3

Strategic ESG is intended to

Accepted Answer

A) increase profits while doing something good at the same time. 
B) follow Milton Friedman's guidance on firm behavior. 
C) be purely altruistic in nature. 
D) avoid the legal and ethical obligations managers have to shareholders. 
A) increase profits while doing something good at the same time. 
B) follow Milton Friedman's guidance on firm behavior. 
C) be purely altruistic in nature. 
D) avoid the legal and ethical obligations managers have to shareholders.

Question 4

If a competitive firm maximizes short-run profits by producing some quantity of output, which of the following must be TRUE at that level of output?

Accepted Answer

A) p = MC 
B) MR = MC 
C) p ≥ AVC 
D) All of the above. 
A) p = MC 
B) MR = MC 
C) p ≥ AVC 
D) All of the above.

Question 5

If a firm goes out of business because of negative economic profits, its books

Accepted Answer

A) might indicate a positive accounting profit. 
B) might indicate that opportunity costs were zero. 
C) might indicate that taxes are too high. 
D) might suggest a mistaken value of explicit costs. 
A) might indicate a positive accounting profit. 
B) might indicate that opportunity costs were zero. 
C) might indicate that taxes are too high. 
D) might suggest a mistaken value of explicit costs.

Question 6

The survival principle states that

Accepted Answer

A) firms must undertake social objectives to survive. 
B) the only firms that survive are those that maximize profits. 
C) the only firms that survive are those that maximize revenue. 
D) managers who fail to maximize profits should be disciplined. 
A) firms must undertake social objectives to survive. 
B) the only firms that survive are those that maximize profits. 
C) the only firms that survive are those that maximize revenue. 
D) managers who fail to maximize profits should be disciplined.

Question 7

U.S. corporations can

Accepted Answer

A) be publicly held and traded. 
B) be closely held. 
C) convert from publicly held to closely held. 
D) All of the above. 
A) be publicly held and traded. 
B) be closely held. 
C) convert from publicly held to closely held. 
D) All of the above.

Question 8

Which of the following generally does NOT seek to maximize profit?

Accepted Answer

A) Public sector companies 
B) Corporations 
C) Partnerships 
D) Sole proprietorships 
A) Public sector companies 
B) Corporations 
C) Partnerships 
D) Sole proprietorships

Question 9

In which governance form do shareholders own the company?

Accepted Answer

A) Public sector 
B) State-owned enterprise 
C) Corporation 
D) Non-profit 
A) Public sector 
B) State-owned enterprise 
C) Corporation 
D) Non-profit

Question 10

A firm will shut down in the short run if

Accepted Answer

A) total fixed costs are too high. 
B) total revenue from operating would not cover all costs. 
C) total revenue from operating would not cover variable costs. 
D) total revenue from operating would not cover fixed costs. 
A) total fixed costs are too high. 
B) total revenue from operating would not cover all costs. 
C) total revenue from operating would not cover variable costs. 
D) total revenue from operating would not cover fixed costs.

Question 11

Vertically integrated firms can use transfer pricing

Accepted Answer

A) to avoid government price controls. 
B) as a way to compensate managers for transferring among departments in a vertically integrated firm. 
C) to avoid paying market prices for inputs. 
D) to shift profit. 
A) to avoid government price controls. 
B) as a way to compensate managers for transferring among departments in a vertically integrated firm. 
C) to avoid paying market prices for inputs. 
D) to shift profit.

Question 12

A firm that backward vertically integrates

Accepted Answer

A) moves downstream in the production process. 
B) requires that the production process be relatively simple. 
C) has to merge with another firm. 
D) may be producing its own inputs. 
A) moves downstream in the production process. 
B) requires that the production process be relatively simple. 
C) has to merge with another firm. 
D) may be producing its own inputs.

Question 13

If a firm is operating at an output level where losses are minimized, the firm

Accepted Answer

A) has no incentive to stay in the industry. 
B) is better of exiting the industry. 
C) is maximizing profits. 
D) will shut down. 
A) has no incentive to stay in the industry. 
B) is better of exiting the industry. 
C) is maximizing profits. 
D) will shut down.

Question 14

A firm's profit is

Accepted Answer

A) usually negative when opportunity costs are included. 
B) the difference between marginal revenue and marginal cost. 
C) the opportunity cost of the firm's shareholders. 
D) the difference between revenue and cost. 
A) usually negative when opportunity costs are included. 
B) the difference between marginal revenue and marginal cost. 
C) the opportunity cost of the firm's shareholders. 
D) the difference between revenue and cost.

Question 15

-The above figure shows the cost curves for a competitive firm. If the market price is $15 per unit, the firm will earn profits of

Accepted Answer

A) $0. 
B) $4. 
C) $40. 
D) $160. 
A) $0. 
B) $4. 
C) $40. 
D) $160.

Question 16

An organization that converts inputs (like Labor, Capital etc.)into output can be a

Accepted Answer

A) firm. 
B) sole proprietorship. 
C) corporation. 
D) All of the above. 
A) firm. 
B) sole proprietorship. 
C) corporation. 
D) All of the above.

Question 17

The board of a U.S. corporation usually includes

Accepted Answer

A) outside directors. 
B) company executives. 
C) former politicians. 
D) All of the above. 
A) outside directors. 
B) company executives. 
C) former politicians. 
D) All of the above.

Question 18

A McDonald's franchise is an example of

Accepted Answer

A) horizontal integration. 
B) quasi-vertical integration. 
C) a vertical merger. 
D) None of the above. 
A) horizontal integration. 
B) quasi-vertical integration. 
C) a vertical merger. 
D) None of the above.

Question 19

A mixed enterprise is one

Accepted Answer

A) where the government has significant ownership in a private company. 
B) in which the company has more than one legal structure, such as limited liability and sole proprietorship. 
C) that combines for-profit activities with education. 
D) that has both for-profit and non-profit operations. 
A) where the government has significant ownership in a private company. 
B) in which the company has more than one legal structure, such as limited liability and sole proprietorship. 
C) that combines for-profit activities with education. 
D) that has both for-profit and non-profit operations.

Question 20

By shutting down, a firm

Accepted Answer

A) stops receiving revenue but continues to pay variable costs. 
B) stops receiving revenue and is stuck with its fixed costs. 
C) avoids its sunk costs as well as its variable costs. 
D) can avoid paying taxes on its previously earned profits. 
A) stops receiving revenue but continues to pay variable costs. 
B) stops receiving revenue and is stuck with its fixed costs. 
C) avoids its sunk costs as well as its variable costs. 
D) can avoid paying taxes on its previously earned profits.

The present value and future value of a loan

Firm managers use poison pills to

Strategic ESG is intended to

If a competitive firm maximizes short-run profits by producing some quantity of output, which of the following must be TRUE at that level of output?

If a firm goes out of business because of negative economic profits, its books

The survival principle states that

U.S. corporations can

Which of the following generally does NOT seek to maximize profit?

In which governance form do shareholders own the company?

A firm will shut down in the short run if

Vertically integrated firms can use transfer pricing

A firm that backward vertically integrates

If a firm is operating at an output level where losses are minimized, the firm

A firm's profit is

-The above figure shows the cost curves for a competitive firm. If the market price is $15 per unit, the firm will earn profits of

An organization that converts inputs (like Labor, Capital etc.)into output can be a

The board of a U.S. corporation usually includes

A McDonald's franchise is an example of

A mixed enterprise is one

By shutting down, a firm

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 7: Firm Organization and Market Structure

The present value and future value of a loan

Firm managers use poison pills to

Strategic ESG is intended to

If a competitive firm maximizes short-run profits by producing some quantity of output, which of the following must be TRUE at that level of output?

If a firm goes out of business because of negative economic profits, its books

The survival principle states that

U.S. corporations can

Which of the following generally does NOT seek to maximize profit?

In which governance form do shareholders own the company?

A firm will shut down in the short run if

Vertically integrated firms can use transfer pricing

A firm that backward vertically integrates

If a firm is operating at an output level where losses are minimized, the firm

A firm's profit is

-The above figure shows the cost curves for a competitive firm. If the market price is $15 per unit, the firm will earn profits of

An organization that converts inputs (like Labor, Capital etc.)into output can be a

The board of a U.S. corporation usually includes

A McDonald's franchise is an example of

A mixed enterprise is one

By shutting down, a firm

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters