Question 1

Supply chain management refers to

Accepted Answer

A) the contracts put in place to manage a firm's suppliers. 
B) the decisions around which stages of production to handle internally and which to buy from others. 
C) how the firm compensates the employees who work on the firm's internal stages of production. 
D) the 19th century practice of having barges move downstream with the flow of the river. 
A) the contracts put in place to manage a firm's suppliers. 
B) the decisions around which stages of production to handle internally and which to buy from others. 
C) how the firm compensates the employees who work on the firm's internal stages of production. 
D) the 19th century practice of having barges move downstream with the flow of the river.

Question 2

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 3

-The above figure shows the cost curves for a competitive firm. The firm will shut down in the short run if price falls below

Accepted Answer

A) $5. 
B) $10. 
C) $11. 
D) $15. 
A) $5. 
B) $10. 
C) $11. 
D) $15.

Question 4

A firm sets its output where

Accepted Answer

A) marginal profit minus marginal cost equals zero (MP - MC = 0). 
B) marginal revenue minus marginal profit equals zero (MR - MP = 0). 
C) marginal revenue minus marginal cost equals zero (MR - MC = 0). 
D) marginal revenue minus marginal cost is greater than zero (MR - MC > 0) 
A) marginal profit minus marginal cost equals zero (MP - MC = 0). 
B) marginal revenue minus marginal profit equals zero (MR - MP = 0). 
C) marginal revenue minus marginal cost equals zero (MR - MC = 0). 
D) marginal revenue minus marginal cost is greater than zero (MR - MC > 0)

Question 5

Corporate Social Responsibility

Accepted Answer

A) is illegal in most countries. 
B) minimizes conflict between owners and managers. 
C) is the pursuit of social objectives by corporations. 
D) disputes the stakeholder theory of R. Edward Freeman. 
A) is illegal in most countries. 
B) minimizes conflict between owners and managers. 
C) is the pursuit of social objectives by corporations. 
D) disputes the stakeholder theory of R. Edward Freeman.

Question 6

Firms might vertically disintegrate when

Accepted Answer

A) it becomes more profitable for a firm to specialize. 
B) the IRS cracks down on transfer pricing. 
C) the industry becomes too large to support itself. 
D) the industry shrinks in size. 
A) it becomes more profitable for a firm to specialize. 
B) the IRS cracks down on transfer pricing. 
C) the industry becomes too large to support itself. 
D) the industry shrinks in size.

Question 7

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 8

In deciding whether to operate in the short run, the firm must consider the relationship between price and

Accepted Answer

A) total cost. 
B) average variable cost. 
C) total fixed cost. 
D) the number of buyers. 
A) total cost. 
B) average variable cost. 
C) total fixed cost. 
D) the number of buyers.

Question 9

If a firm doesn't make an economic profit it will shut down.

Accepted Answer

A) True 
 B)False

Question 10

One problem with compensation systems is that

Accepted Answer

A) sometimes a manager is rewarded for an objective other than maximizing profits. 
B) managers are often paid too much. 
C) owners sometimes want to pursue social objectives. 
D) the Dodd-Frank Act of 2010 requires shareholder votes on compensation that are non-binding. 
A) sometimes a manager is rewarded for an objective other than maximizing profits. 
B) managers are often paid too much. 
C) owners sometimes want to pursue social objectives. 
D) the Dodd-Frank Act of 2010 requires shareholder votes on compensation that are non-binding.

Question 11

Economists typically assume that the owners of firms wish to

Accepted Answer

A) produce efficiently. 
B) maximize sales revenues. 
C) maximize profits. 
D) All of the above. 
A) produce efficiently. 
B) maximize sales revenues. 
C) maximize profits. 
D) All of the above.

Question 12

A firm sets its output where

Accepted Answer

A) marginal profit is zero. 
B) marginal revenue is maximized. 
C) marginal profit equals marginal revenue. 
D) marginal profit is maximized. 
A) marginal profit is zero. 
B) marginal revenue is maximized. 
C) marginal profit equals marginal revenue. 
D) marginal profit is maximized.

Question 13

A company that undertakes an activity so that it can "do well by doing good" is practicing

Accepted Answer

A) strategic corporate social responsibility. 
B) altruistic corporate social responsibility. 
C) profit sharing. 
D) the survivor principle. 
A) strategic corporate social responsibility. 
B) altruistic corporate social responsibility. 
C) profit sharing. 
D) the survivor principle.

Question 14

Limited liability is a benefit available only to

Accepted Answer

A) sole proprietorships. 
B) partnerships. 
C) corporations. 
D) All of the above. 
A) sole proprietorships. 
B) partnerships. 
C) corporations. 
D) All of the above.

Question 15

The board of a U.S. corporation usually includes

Accepted Answer

A) outside directors. 
B) executives of competitors. 
C) non-executive employees of the corporation. 
D) All of the above. 
A) outside directors. 
B) executives of competitors. 
C) non-executive employees of the corporation. 
D) All of the above.

Question 16

Market structure depends upon

Accepted Answer

A) the ease of entry and exit. 
B) the ability of firms to differentiate their goods and services. 
C) the number of firms in the market. 
D) All of the above. 
A) the ease of entry and exit. 
B) the ability of firms to differentiate their goods and services. 
C) the number of firms in the market. 
D) All of the above.

Question 17

A firm should always shut down if its revenue is

Accepted Answer

A) declining. 
B) less than its average fixed costs. 
C) less than its total costs. 
D) less than its avoidable costs. 
A) declining. 
B) less than its average fixed costs. 
C) less than its total costs. 
D) less than its avoidable costs.

Question 18

Which entity produces the greatest proportion of U.S. gross national product?

Accepted Answer

A) government 
B) non-profit organizations such as hospitals 
C) firms 
D) universities 
A) government 
B) non-profit organizations such as hospitals 
C) firms 
D) universities

Supply chain management refers 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?

-The above figure shows the cost curves for a competitive firm. The firm will shut down in the short run if price falls below

A firm sets its output where

Corporate Social Responsibility

Firms might vertically disintegrate when

A firm that backward vertically integrates

In deciding whether to operate in the short run, the firm must consider the relationship between price and

If a firm doesn't make an economic profit it will shut down.

One problem with compensation systems is that

Economists typically assume that the owners of firms wish to

A firm sets its output where

A company that undertakes an activity so that it can "do well by doing good" is practicing

Limited liability is a benefit available only to

The board of a U.S. corporation usually includes

Market structure depends upon

A firm should always shut down if its revenue is

Which entity produces the greatest proportion of U.S. gross national product?

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

Supply chain management refers 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?

-The above figure shows the cost curves for a competitive firm. The firm will shut down in the short run if price falls below

A firm sets its output where

Corporate Social Responsibility

Firms might vertically disintegrate when

A firm that backward vertically integrates

In deciding whether to operate in the short run, the firm must consider the relationship between price and

If a firm doesn't make an economic profit it will shut down.

One problem with compensation systems is that

Economists typically assume that the owners of firms wish to

A firm sets its output where

A company that undertakes an activity so that it can "do well by doing good" is practicing

Limited liability is a benefit available only to

The board of a U.S. corporation usually includes

Market structure depends upon

A firm should always shut down if its revenue is

Which entity produces the greatest proportion of U.S. gross national product?

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