Question 1

Monitoring a manager can be difficult if

Accepted Answer

A)  the owner and manager do not have an enforceable contract. 
B)  the owner cannot easily observe the manager's actions. 
C)  the manager doesn't have to use a time clock. 
D)  the board does not have enough outside directors. 
A)  the owner and manager do not have an enforceable contract. 
B)  the owner cannot easily observe the manager's actions. 
C)  the manager doesn't have to use a time clock. 
D)  the board does not have enough outside directors.

Question 2

If a firm makes zero economic profit,then the firm

Accepted Answer

A)  has total revenues greater than its economic costs. 
B)  must shut down. 
C)  can be earning positive business profit. 
D)  must have no fixed costs. 
A)  has total revenues greater than its economic costs. 
B)  must shut down. 
C)  can be earning positive business profit. 
D)  must have no fixed costs.

Question 3

A common incentive owners offer managers is

Accepted Answer

A)  the year-end bonus. 
B)  stock options. 
C)  profit sharing. 
D)  All of the above. 
A)  the year-end bonus. 
B)  stock options. 
C)  profit sharing. 
D)  All of the above.

Question 4

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 5

-The above figure shows the cost curves for a competitive firm.If the profit-maximizing level of output is 40 price is equal to

Accepted Answer

A)  $0. 
B)  $15. 
C)  $10. 
D)  $11. 
A)  $0. 
B)  $15. 
C)  $10. 
D)  $11.

Question 6

If a profit-maximizing firm finds that,at its current level of production,MR > MC,it will

Accepted Answer

A)  earn greater profits than if MR = MC. 
B)  increase output. 
C)  decrease output. 
D)  shut down. 
A)  earn greater profits than if MR = MC. 
B)  increase output. 
C)  decrease output. 
D)  shut down.

Question 7

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 8

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 9

A conflict between an owner and a manager may occur when

Accepted Answer

A)  the manager earns more when the firm has higher profits. 
B)  the manager is seeking to maximize leisure time. 
C)  the owner can easily observe the manager slacking off and reward him accordingly. 
D)  the firm is very small and the manager must perform multiple tasks. 
A)  the manager earns more when the firm has higher profits. 
B)  the manager is seeking to maximize leisure time. 
C)  the owner can easily observe the manager slacking off and reward him accordingly. 
D)  the firm is very small and the manager must perform multiple tasks.

Question 10

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)  None of the above. 
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)  None of the above.

Monitoring a manager can be difficult if

If a firm makes zero economic profit,then the firm

A common incentive owners offer managers is

A firm should always shut down if its revenue is

-The above figure shows the cost curves for a competitive firm.If the profit-maximizing level of output is 40 price is equal to

If a profit-maximizing firm finds that,at its current level of production,MR > MC,it will

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

A firm sets its output where

A conflict between an owner and a manager may occur when

A firm sets its output where

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

Monitoring a manager can be difficult if

If a firm makes zero economic profit,then the firm

A common incentive owners offer managers is

A firm should always shut down if its revenue is

-The above figure shows the cost curves for a competitive firm.If the profit-maximizing level of output is 40 price is equal to

If a profit-maximizing firm finds that,at its current level of production,MR > MC,it will

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

A firm sets its output where

A conflict between an owner and a manager may occur when

A firm sets its output where

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