Exam 10: Organizing Production

Methods for making 2,000 CDs per day -In the table above, if the cost of capital is $20 per day and an hour of labor is $15 per day, which method is economically efficient?

What is the main advantage and the main disadvantage of organizing a businesses as either a proprietorship or as a partnership rather than as a corporation?

In an oligopoly with two firms, one firm's share of the market is 70 percent. The Herfindahl-Hirschman Index is

What is a normal profit? Is it part of the firm's opportunity costs, total revenue, or neither?

The owner of a proprietorship has ________ liability and ________ required to use all of his or her entire wealth to pay for the firm's losses.

Firms use incentives to pursue their most fundamental goal, which is to maximize

Quick Auto Service will do oil changes. If each oil change is done by five people, each of whom specializes in one task, this is an example of

It was more than a century ago that an engineer named Frederick Taylor walked into factories and starting timing workers with a stop watch. He dissected their movements, and organized them more efficiently. He turned factory production into a science. Suppose work was completed in the factory based on what the floor manager decided and workers were paid a flat daily wage. How does this firm organize production?

Greg and Todd form a partnership and start a business in which each has a 50 percent share of the profit. After a year, the firm goes bankrupt and has debts of $20,000. Greg has no money, but Todd has $25,000 in the bank. Todd must pay ________ of debt.

-The table below shows four alternative techniques for assembling a car. The cost of labor is $20 per hour, and the cost of capital is $10 per hour. Which of the four techniques for assembling a car is NOT technologically efficient?

Which of the following indicates a high degree of competition?

Suppose Angelo Sessa, owner of Sezz Medi Brick Oven Pizza in NYC, earns $350,000 in revenue per year. He spends $800 a month on ash wood for his stove, $2000 a month on rent, and $1500 a month on ingredients. He used to be a lawyer and earned $240,000 a year before he opened up Sezz Medi. Normal profit for a pizza business is $30,000. What is Angelo's economic profit?

-The cookie industry in Eatsweetland consists of 15 firms. The industry sales are $80 million per month. The sales of the largest 5 firms are shown in the table below. The rest 10 firms have sales of $3 million each. Which of the following best describes the structure of the market for cookies in Eatsweetland?

Coca Cola and Pepsi, which together account for about 85 percent of the soft drink market, are best described as being in

The profits of a partnership are

You have just been named President and Chief Executive Officer at the StrideRite Shoe Corporation. This appointment places you in the role of ________ to lower managers and ________ to the stockholders.

-The table above lists the market shares of the twenty makers of personal computers. Based upon the Herfindahl-Hirschman Index

Which of the following is a reason why firms may be more efficient than markets as coordinators of economic activity?

Economic profit is

A baseball player who has signed a long-term contract with his club and then constantly says he is injured and cannot play is an example of