Question 1

How has organizing a successful firm in a market economy changed over the last century?

Accepted Answer

A)  It has become easier as more and more firms discover how to do it. 
B)  As government intervention has decreased, firms now have more freedom. 
C)  There has been no change one way or the other over the last century. 
D)  It has become more difficult to organize an efficient and successful firm. 
A)  It has become easier as more and more firms discover how to do it. 
B)  As government intervention has decreased, firms now have more freedom. 
C)  There has been no change one way or the other over the last century. 
D)  It has become more difficult to organize an efficient and successful firm.

Question 2

Steve Ballmer is the Chief Executive Officer of Microsoft as well as a member of Microsoft's board of directors.Ballmer is therefore classified as an

Accepted Answer

A)  inside director. 
B)  outside director. 
C)  independent director. 
D)  unbiased director. 
A)  inside director. 
B)  outside director. 
C)  independent director. 
D)  unbiased director.

Question 3

What is economic profit?

Accepted Answer

A)  gross revenue minus explicit costs 
B)  gross revenue minus implicit costs 
C)  gross revenue minus explicit and implicit costs 
D)  the same as accounting profit 
A)  gross revenue minus explicit costs 
B)  gross revenue minus implicit costs 
C)  gross revenue minus explicit and implicit costs 
D)  the same as accounting profit

Question 4

David Myers,former controller for WorldCom,pleaded guilty to falsely reported costs for WorldCom that were ________ than they actually were,resulting in reported accounting profits for WorldCom that were ________ than their actual level.

Accepted Answer

A)  higher; higher 
B)  lower; higher 
C)  lower; lower 
D)  higher; lower 
A)  higher; higher 
B)  lower; higher 
C)  lower; lower 
D)  higher; lower

Question 5

If you own a bond with a 3 percent coupon rate and new bonds are paying 8 percent,what will happen to your bond's market price?

Accepted Answer

The answer of If you own a bond with a...

Question 6

What is the most common type of business?

Accepted Answer

A)  corporation 
B)  partnership 
C)  sole proprietorship 
D)  They are equally represented because of Federal laws. 
A)  corporation 
B)  partnership 
C)  sole proprietorship 
D)  They are equally represented because of Federal laws.

Question 7

What is the formula you should use to determine a bank account's future value in one year?

Accepted Answer

A)  Future value equals the present value plus the rate of interest. 
B)  Future value equals the present value minus the rate of interest. 
C)  Future value equals the present value multiplied by one plus the rate of interest in decimals. 
D)  Future value equals the present value divided by one plus the rate of interest in decimals. 
A)  Future value equals the present value plus the rate of interest. 
B)  Future value equals the present value minus the rate of interest. 
C)  Future value equals the present value multiplied by one plus the rate of interest in decimals. 
D)  Future value equals the present value divided by one plus the rate of interest in decimals.

Question 8

A firm in a market economy must do all of the following to succeed except

Accepted Answer

A)  produce the goods and services that consumers want at a lower cost than consumers themselves can produce. 
B)  organize the factors of production into a functioning, efficient unit. 
C)  have access to sufficient funds. 
D)  be organized as a corporation. 
A)  produce the goods and services that consumers want at a lower cost than consumers themselves can produce. 
B)  organize the factors of production into a functioning, efficient unit. 
C)  have access to sufficient funds. 
D)  be organized as a corporation.

Question 9

In a typical year,________ new firms open in the United States.

Accepted Answer

A)  more than 600,000 
B)  more than 1 million 
C)  less than 200,000 
D)  approximately 125,000 
A)  more than 600,000 
B)  more than 1 million 
C)  less than 200,000 
D)  approximately 125,000

Question 10

Jake sells Star Wars memorabilia on eBay.His annual revenue is $42,000 per year,the explicit costs of his business are $10,000,and the opportunity costs of his business are $18,000 per year.What are the implicit costs of his business?

Accepted Answer

A)  $8,000 
B)  $18,000 
C)  $24,000 
D)  $32,000 
A)  $8,000 
B)  $18,000 
C)  $24,000 
D)  $32,000

Question 11

What role do well functioning financial markets play in a market economy?

Accepted Answer

They allocate saved

Question 12

Which of the following does not take place in the direct finance market?

Accepted Answer

A)  Ownership in corporations is sold in the form of common stock. 
B)  Deposits from savers are accumulated and loans made to borrowers. 
C)  Ownership in corporations is sold in the form of preferred stock. 
D)  Corporate bonds are sold to savers. 
A)  Ownership in corporations is sold in the form of common stock. 
B)  Deposits from savers are accumulated and loans made to borrowers. 
C)  Ownership in corporations is sold in the form of preferred stock. 
D)  Corporate bonds are sold to savers.

Question 13

Who controls a sole proprietorship?

Accepted Answer

A)  owner 
B)  stockholders 
C)  bondholders 
D)  employees 
A)  owner 
B)  stockholders 
C)  bondholders 
D)  employees

Question 14

What is the central role of financial intermediaries in a market economy?

Accepted Answer

A)  the creation and printing of money 
B)  keeping the price level stable 
C)  bringing together savers and borrowers 
D)  providing safe deposit boxes for people and businesses 
A)  the creation and printing of money 
B)  keeping the price level stable 
C)  bringing together savers and borrowers 
D)  providing safe deposit boxes for people and businesses

Question 15

In 2011,the dividend yield on Microsoft (MSFT)stock rose from 1.97% to 3.10%.Which of the following would have generated that result?

Accepted Answer

A)  The closing price of Microsoft stock rose. 
B)  Microsoft announced an increase in the dividend it would pay per share. 
C)  The price-earnings ratio rose. 
D)  Microsoft issued bonds with a coupon rate equal to 3.10%. 
A)  The closing price of Microsoft stock rose. 
B)  Microsoft announced an increase in the dividend it would pay per share. 
C)  The price-earnings ratio rose. 
D)  Microsoft issued bonds with a coupon rate equal to 3.10%.

Question 16

A partnership is ________ type of business.

Accepted Answer

A)  the most common. 
B)  the least common 
C)  the least risky 
D)  the most profitable 
A)  the most common. 
B)  the least common 
C)  the least risky 
D)  the most profitable

Question 17

In August 2011,Abercrombie & Fitch (ANF)posted a price-earnings ratio of 37.If the price of the stock at that time was $65 per share,which of the following must have been true?

Accepted Answer

A)  ANF's revenues that month were $2.405 million. 
B)  ANF's earnings per share was $1.76. 
C)  ANF's coupon payment was $17.57 per year. 
D)  ANF's dividend yield for the year was 65%. 
A)  ANF's revenues that month were $2.405 million. 
B)  ANF's earnings per share was $1.76. 
C)  ANF's coupon payment was $17.57 per year. 
D)  ANF's dividend yield for the year was 65%.

Question 18

If you own a $1,000 face value bond with one year remaining to maturity and a 3 percent coupon rate and new bonds are paying 14 percent,what is the most you can get for your old bond?

Accepted Answer

A)  $903.51 
B)  $997.19 
C)  $1,000 
D)  $1,140 
A)  $903.51 
B)  $997.19 
C)  $1,000 
D)  $1,140

Question 19

Which of the following would be considered an implicit cost of operating a business?

Accepted Answer

A)  advertising expenses 
B)  wages paid to workers 
C)  a normal rate of return for investors 
D)  any explicit cost 
A)  advertising expenses 
B)  wages paid to workers 
C)  a normal rate of return for investors 
D)  any explicit cost

Question 20

Corporate managers and shareholders always have the same goals.

Accepted Answer

A) True 
 B)False

How has organizing a successful firm in a market economy changed over the last century?

Steve Ballmer is the Chief Executive Officer of Microsoft as well as a member of Microsoft's board of directors.Ballmer is therefore classified as an

What is economic profit?

David Myers,former controller for WorldCom,pleaded guilty to falsely reported costs for WorldCom that were than they actually were,resulting in reported accounting profits for WorldCom that were than their actual level.

If you own a bond with a 3 percent coupon rate and new bonds are paying 8 percent,what will happen to your bond's market price?

What is the most common type of business?

What is the formula you should use to determine a bank account's future value in one year?

A firm in a market economy must do all of the following to succeed except

In a typical year,________ new firms open in the United States.

Jake sells Star Wars memorabilia on eBay.His annual revenue is $42,000 per year,the explicit costs of his business are $10,000,and the opportunity costs of his business are $18,000 per year.What are the implicit costs of his business?

What role do well functioning financial markets play in a market economy?

Which of the following does not take place in the direct finance market?

Who controls a sole proprietorship?

What is the central role of financial intermediaries in a market economy?

In 2011,the dividend yield on Microsoft (MSFT)stock rose from 1.97% to 3.10%.Which of the following would have generated that result?

A partnership is ________ type of business.

In August 2011,Abercrombie & Fitch (ANF)posted a price-earnings ratio of 37.If the price of the stock at that time was $65 per share,which of the following must have been true?

If you own a $1,000 face value bond with one year remaining to maturity and a 3 percent coupon rate and new bonds are paying 14 percent,what is the most you can get for your old bond?

Which of the following would be considered an implicit cost of operating a business?

Corporate managers and shareholders always have the same goals.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 6: Firms, the Stock Market, and Corporate Governance

How has organizing a successful firm in a market economy changed over the last century?

Steve Ballmer is the Chief Executive Officer of Microsoft as well as a member of Microsoft's board of directors.Ballmer is therefore classified as an

What is economic profit?

David Myers,former controller for WorldCom,pleaded guilty to falsely reported costs for WorldCom that were ________ than they actually were,resulting in reported accounting profits for WorldCom that were ________ than their actual level.

If you own a bond with a 3 percent coupon rate and new bonds are paying 8 percent,what will happen to your bond's market price?

What is the most common type of business?

What is the formula you should use to determine a bank account's future value in one year?

A firm in a market economy must do all of the following to succeed except

In a typical year,________ new firms open in the United States.

Jake sells Star Wars memorabilia on eBay.His annual revenue is $42,000 per year,the explicit costs of his business are $10,000,and the opportunity costs of his business are $18,000 per year.What are the implicit costs of his business?

What role do well functioning financial markets play in a market economy?

Which of the following does not take place in the direct finance market?

Who controls a sole proprietorship?

What is the central role of financial intermediaries in a market economy?

In 2011,the dividend yield on Microsoft (MSFT)stock rose from 1.97% to 3.10%.Which of the following would have generated that result?

A partnership is ________ type of business.

In August 2011,Abercrombie & Fitch (ANF)posted a price-earnings ratio of 37.If the price of the stock at that time was $65 per share,which of the following must have been true?

If you own a $1,000 face value bond with one year remaining to maturity and a 3 percent coupon rate and new bonds are paying 14 percent,what is the most you can get for your old bond?

Which of the following would be considered an implicit cost of operating a business?

Corporate managers and shareholders always have the same goals.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

David Myers,former controller for WorldCom,pleaded guilty to falsely reported costs for WorldCom that were than they actually were,resulting in reported accounting profits for WorldCom that were than their actual level.