Question 1

The four-firm concentration ratio equals the percentage of the value of ________ accounted for by the four ________ firms in the industry.

Accepted Answer

A)  sales; smallest 
B)  profits; smallest 
C)  sales; largest 
D)  profits; largest 
A)  sales; smallest 
B)  profits; smallest 
C)  sales; largest 
D)  profits; largest

Question 2

Where large amounts of capital are used, the dominant form of business organization is the

Accepted Answer

A)  corporation. 
B)  partnership. 
C)  proprietorship. 
D)  partnership in manufacturing and the corporation in finance. 
A)  corporation. 
B)  partnership. 
C)  proprietorship. 
D)  partnership in manufacturing and the corporation in finance.

Question 3

Which of the following types of business organization have limited liability? I. proprietorship
II) partnership
III) corporation

Accepted Answer

A)  I, II only 
B)  II, III only 
C)  III only 
D)  I, II, III 
A)  I, II only 
B)  II, III only 
C)  III only 
D)  I, II, III

Question 4

There are 6 firms in a market and the market shares of the firms are 40 percent, 30 percent, 10 percent, 8 percent, 7 percent, and 5 percent. The Herfindahl-Hirschman index is

Accepted Answer

A)  2738. 
B)  2664. 
C)  100. 
D)  88. 
A)  2738. 
B)  2664. 
C)  100. 
D)  88.

Question 5

An example of the principal-agent problem is when

Accepted Answer

A)  managers try to cope with employees that are inefficient. 
B)  proprietors don't receive any money payment for their entrepreneurial skills. 
C)  managers devise penalties that eliminate employee waste. 
D)  managers devise incentives that encourage employees to act in the owner's behalf. 
A)  managers try to cope with employees that are inefficient. 
B)  proprietors don't receive any money payment for their entrepreneurial skills. 
C)  managers devise penalties that eliminate employee waste. 
D)  managers devise incentives that encourage employees to act in the owner's behalf.

Question 6

An advantage of a partnership over a corporation is that

Accepted Answer

A)  a partnership's profits are taxed only once, while retained profits of a corporation are taxed twice. 
B)  a partnership's owners usually have limited liability, while the entire wealth of owners of a corporation is at risk. 
C)  a partnership has a perpetual life, while a corporation dies with its owners. 
D)  a partnership's cost of capital is low relative to that of a corporation. 
A)  a partnership's profits are taxed only once, while retained profits of a corporation are taxed twice. 
B)  a partnership's owners usually have limited liability, while the entire wealth of owners of a corporation is at risk. 
C)  a partnership has a perpetual life, while a corporation dies with its owners. 
D)  a partnership's cost of capital is low relative to that of a corporation.

Question 7

Production Information for
Scully's Splendid Spacecrafts
  
-In the above table, if the price of labor is $10 per hour and the price of capital is $20 per unit, what is the total cost of Technique W?

Accepted Answer

A)  $80,000 
B)  $200,000 
C)  $280,000 
D)  $360,000 
A)  $80,000 
B)  $200,000 
C)  $280,000 
D)  $360,000

Question 8

Economies of scope has to do with lowering production costs by increasing the quantity of a product produced, whereas economies of scale has to do with lowering production costs by producing several products within the same firm.

Accepted Answer

A) True 
 B)False

Question 9

The market for wheat is an example of

Accepted Answer

A)  a monopoly market. 
B)  an oligopolistic market. 
C)  a perfectly competitive market. 
D)  a monopolistically competitive market. 
A)  a monopoly market. 
B)  an oligopolistic market. 
C)  a perfectly competitive market. 
D)  a monopolistically competitive market.

Question 10

-The table above lists the market shares of the twenty makers of personal computers. The four-firm concentration equals

Accepted Answer

A)  5 percent. 
B)  20 percent. 
C)  25 percent. 
D)  100 percent. 
A)  5 percent. 
B)  20 percent. 
C)  25 percent. 
D)  100 percent.

Question 11

In the personal computer (PC) market in the first half of 2008, Hewlett-Packard maintained its worldwide No. 1 ranking at a market share of 19.1 percent. Dell's market share was 16 percent, Acer held onto third place with a 9.5 percent share, and Lenovo maintained fourth place with a 7.9 percent share. Predict the range of the Herfindahl-Hirschman Index for the PC market.

Accepted Answer

A)  0 - 100 
B)  100 - 999 
C)  10,000 
D)  800 - 1,200 
A)  0 - 100 
B)  100 - 999 
C)  10,000 
D)  800 - 1,200

Question 12

-The table above shows sales of the firms in the pet food industry. What type of market is this?

Accepted Answer

A)  perfect competition 
B)  monopolistic competition 
C)  oligopoly 
D)  monopoly 
A)  perfect competition 
B)  monopolistic competition 
C)  oligopoly 
D)  monopoly

Question 13

When Jitters Coffee Company, Inc., can lower the cost of packaging a pound of coffee by doubling the quantity packaged each day, it is achieving

Accepted Answer

A)  economies of scale. 
B)  economies of scope. 
C)  economies of team production. 
D)  all of the above 
A)  economies of scale. 
B)  economies of scope. 
C)  economies of team production. 
D)  all of the above

Question 14

Sheila's Sports Shop is a very popular sporting goods store, which has a yearly revenue of $600,000. Sheila runs the business herself. Her alternative employment options are to be a college swimming coach for $50,000 per year or a construction worker for $40,000 per year. Sheila spends $230,000 purchasing goods for resale to her customers. She also has four employees, who each earn $25,000 per year. Sheila owns the building that her Sports Shop is housed in and she could have rented it out for $20,000 per year. Sheila's costs for resources bought in the market equal

Accepted Answer

A)  $70,000 per year. 
B)  $200,000 per year. 
C)  $330,000 per year. 
D)  $350,000 per year. 
A)  $70,000 per year. 
B)  $200,000 per year. 
C)  $330,000 per year. 
D)  $350,000 per year.

Question 15

Fatz Confectionery is a candy company that operates at the risk of unlimited liability for its many owner in case, for instance, all of its former employees win a class action lawsuit because of "sugar-lung" developed over decades of working there. Thus Fatz is a

Accepted Answer

A)  proprietorship. 
B)  partnership. 
C)  either of the above. 
D)  neither of the above. 
A)  proprietorship. 
B)  partnership. 
C)  either of the above. 
D)  neither of the above.

Question 16

What is an incentive system?

Accepted Answer

An incentive system is a method of organ

Question 17

A market structure in which one firm produces a good or service that has no close substitutes is called

Accepted Answer

A)  perfect competition. 
B)  monopolistic competition. 
C)  oligopoly. 
D)  monopoly. 
A)  perfect competition. 
B)  monopolistic competition. 
C)  oligopoly. 
D)  monopoly.

Question 18

-The table above shows sales of the firms in the pet food industry. The four-firm concentration ratio in the industry is

Accepted Answer

A)  59 percent. 
B)  80 percent. 
C)  70 percent. 
D)  40 percent. 
A)  59 percent. 
B)  80 percent. 
C)  70 percent. 
D)  40 percent.

Question 19

In the United States, ________ account for the largest portion of all firms; ________ account for most of the total revenue received by businesses.

Accepted Answer

A)  Proprietorships; partnerships 
B)  Proprietorships; corporations 
C)  Partnerships; corporations 
D)  Corporations; proprietorships 
A)  Proprietorships; partnerships 
B)  Proprietorships; corporations 
C)  Partnerships; corporations 
D)  Corporations; proprietorships

Question 20

Flora's Flower Shop bought a new van for $23,000. Today, the market price of this van is $11,000. The economic depreciation of the van is

Accepted Answer

A)  $23,000. 
B)  $12,000. 
C)  $11,000. 
D)  $34,000. 
A)  $23,000. 
B)  $12,000. 
C)  $11,000. 
D)  $34,000.

The four-firm concentration ratio equals the percentage of the value of accounted for by the four firms in the industry.

Where large amounts of capital are used, the dominant form of business organization is the

Which of the following types of business organization have limited liability? I. proprietorship II) partnership III) corporation

There are 6 firms in a market and the market shares of the firms are 40 percent, 30 percent, 10 percent, 8 percent, 7 percent, and 5 percent. The Herfindahl-Hirschman index is

An example of the principal-agent problem is when

An advantage of a partnership over a corporation is that

Production Information for Scully's Splendid Spacecrafts -In the above table, if the price of labor is $10 per hour and the price of capital is $20 per unit, what is the total cost of Technique W?

Economies of scope has to do with lowering production costs by increasing the quantity of a product produced, whereas economies of scale has to do with lowering production costs by producing several products within the same firm.

The market for wheat is an example of

-The table above lists the market shares of the twenty makers of personal computers. The four-firm concentration equals

-The table above shows sales of the firms in the pet food industry. What type of market is this?

When Jitters Coffee Company, Inc., can lower the cost of packaging a pound of coffee by doubling the quantity packaged each day, it is achieving

Fatz Confectionery is a candy company that operates at the risk of unlimited liability for its many owner in case, for instance, all of its former employees win a class action lawsuit because of "sugar-lung" developed over decades of working there. Thus Fatz is a

What is an incentive system?

A market structure in which one firm produces a good or service that has no close substitutes is called

-The table above shows sales of the firms in the pet food industry. The four-firm concentration ratio in the industry is

In the United States, account for the largest portion of all firms; account for most of the total revenue received by businesses.

Flora's Flower Shop bought a new van for $23,000. Today, the market price of this van is $11,000. The economic depreciation of the van is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 10: Organizing Production

The four-firm concentration ratio equals the percentage of the value of ________ accounted for by the four ________ firms in the industry.

Where large amounts of capital are used, the dominant form of business organization is the

Which of the following types of business organization have limited liability? I. proprietorship II) partnership III) corporation

There are 6 firms in a market and the market shares of the firms are 40 percent, 30 percent, 10 percent, 8 percent, 7 percent, and 5 percent. The Herfindahl-Hirschman index is

An example of the principal-agent problem is when

An advantage of a partnership over a corporation is that

Production Information for Scully's Splendid Spacecrafts -In the above table, if the price of labor is $10 per hour and the price of capital is $20 per unit, what is the total cost of Technique W?

Economies of scope has to do with lowering production costs by increasing the quantity of a product produced, whereas economies of scale has to do with lowering production costs by producing several products within the same firm.

The market for wheat is an example of

-The table above lists the market shares of the twenty makers of personal computers. The four-firm concentration equals

-The table above shows sales of the firms in the pet food industry. What type of market is this?

When Jitters Coffee Company, Inc., can lower the cost of packaging a pound of coffee by doubling the quantity packaged each day, it is achieving

Fatz Confectionery is a candy company that operates at the risk of unlimited liability for its many owner in case, for instance, all of its former employees win a class action lawsuit because of "sugar-lung" developed over decades of working there. Thus Fatz is a

What is an incentive system?

A market structure in which one firm produces a good or service that has no close substitutes is called

-The table above shows sales of the firms in the pet food industry. The four-firm concentration ratio in the industry is

In the United States, ________ account for the largest portion of all firms; ________ account for most of the total revenue received by businesses.

Flora's Flower Shop bought a new van for $23,000. Today, the market price of this van is $11,000. The economic depreciation of the van is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

The four-firm concentration ratio equals the percentage of the value of accounted for by the four firms in the industry.

In the United States, account for the largest portion of all firms; account for most of the total revenue received by businesses.