Question 1

Which of the following is not an advantage of starting a new business as a sole proprietorship?

Accepted Answer

A)  separation of ownership and business liability 
B)  limited control over the operation of the business 
C)  the initial cost in setting up the business 
D)  possibility of double taxation 
A)  separation of ownership and business liability 
B)  limited control over the operation of the business 
C)  the initial cost in setting up the business 
D)  possibility of double taxation

Question 2

If top managers make good decisions,the firm's profits will be ________,and the firms assets will be ________.

Accepted Answer

A)  high; small relative to its liabilities. 
B)  high; large relative to its liabilities. 
C)  equal to its revenues; small relative to its liabilities. 
D)  low; large relative to its liabilities 
A)  high; small relative to its liabilities. 
B)  high; large relative to its liabilities. 
C)  equal to its revenues; small relative to its liabilities. 
D)  low; large relative to its liabilities

Question 3

Tommy's Teddy Bears incurs $300,000 per year in explicit costs and $50,000 in implicit costs.The shop earns $600,000 in revenues and has $1.1 million in net worth.Based on this information,what is accounting profit for Tommy's Teddy Bears?

Accepted Answer

A)  $250,000 
B)  $300,000 
C)  $500,000 
D)  $1.35 million 
A)  $250,000 
B)  $300,000 
C)  $500,000 
D)  $1.35 million

Question 4

The only type of business that faces unlimited liability is a sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 5

Anita is the retired president of Claddagh College and currently serves on the board of directors of the Patrician Pharmaceutical Company.Anita is considered ________ of the company.

Accepted Answer

A)  a managing director 
B)  an inside director 
C)  a silent partner 
D)  an outside director 
A)  a managing director 
B)  an inside director 
C)  a silent partner 
D)  an outside director

Question 6

Define a partnership.

Accepted Answer

A partnership is a f

Question 7

A corporation is owned by its

Accepted Answer

A)  board of directors. 
B)  stockholders. 
C)  employees. 
D)  CEO. 
A)  board of directors. 
B)  stockholders. 
C)  employees. 
D)  CEO.

Question 8

Included on the board of directors of Twitter are Debra L.Lee,chairman and chief executive officer of BET Networks,the CEO of 1stdibs.com David Rosenblatt,and MacArthur Foundation chairman Marjorie Scardino.These three board members do not have a direct management role with Twitter and are therefore referred to as

Accepted Answer

A)  inside directors. 
B)  outside directors. 
C)  competitive directors. 
D)  honorary directors. 
A)  inside directors. 
B)  outside directors. 
C)  competitive directors. 
D)  honorary directors.

Question 9

If a corporate bond with face value of $5,000 has an interest rate of 4 percent paid once a year for a term of 30 years,what is the size of the coupon payment?

Accepted Answer

A)  $4 
B)  $200 
C)  $1,250 
D)  $5,000 
A)  $4 
B)  $200 
C)  $1,250 
D)  $5,000

Question 10

As a business type,corporations ________ in the United States.

Accepted Answer

A)  earn the majority of profits 
B)  are the most common 
C)  are the least common 
D)  are subject to the least amount of taxes 
A)  earn the majority of profits 
B)  are the most common 
C)  are the least common 
D)  are subject to the least amount of taxes

Question 11

An asset is anything of value owned by a person or firm.

Accepted Answer

A) True 
 B)False

Question 12

What is shown on a firm's income statement?

Accepted Answer

A)  costs 
B)  profits 
C)  revenues 
D)  All of these are shown on a firm's income statement. 
A)  costs 
B)  profits 
C)  revenues 
D)  All of these are shown on a firm's income statement.

Question 13

Tommy's Teddy Bears incurs $300,000 per year in explicit costs and $50,000 in implicit costs.The shop earns $600,000 in revenues and has $1.1 million in net worth.Based on this information,what is economic profit for Tommy's Teddy Bears?

Accepted Answer

A)  $250,000 
B)  $300,000 
C)  $500,000 
D)  $1.35 million 
A)  $250,000 
B)  $300,000 
C)  $500,000 
D)  $1.35 million

Question 14

The three most widely followed stock indexes in the United States include all of the following except

Accepted Answer

A)  the Dow Jones Industrial Average. 
B)  the S&P 500. 
C)  the Fortune 500. 
D)  the NASDAQ Composite Index. 
A)  the Dow Jones Industrial Average. 
B)  the S&P 500. 
C)  the Fortune 500. 
D)  the NASDAQ Composite Index.

Question 15

When a business is set up as a sole proprietorship,the owner of the business faces limited liability.

Accepted Answer

A) True 
 B)False

Question 16

How can a proprietorship or partnership raise funds for expansion?

Accepted Answer

A)  borrow from someone or an institution willing to lend the funds 
B)  reinvest profit back into the business 
C)  take on a partner or more partners 
D)  Any of these would generate funds for expansion. 
A)  borrow from someone or an institution willing to lend the funds 
B)  reinvest profit back into the business 
C)  take on a partner or more partners 
D)  Any of these would generate funds for expansion.

Question 17

In the United States,________ percent of all firms are partnerships.

Accepted Answer

A)  4 
B)  10 
C)  14 
D)  26 
A)  4 
B)  10 
C)  14 
D)  26

Question 18

The shareholders of a corporation

Accepted Answer

A)  are inside directors of the corporation. 
B)  are only comprised of top management for a large corporation. 
C)  directly manage the corporation. 
D)  elect a board of directors to represent their interests. 
A)  are inside directors of the corporation. 
B)  are only comprised of top management for a large corporation. 
C)  directly manage the corporation. 
D)  elect a board of directors to represent their interests.

Question 19

What is a primary market?

Accepted Answer

A)  a market where primary inputs like steel are sold 
B)  a market where you can sell any bonds you own as a private investor 
C)  a market where newly issued claims are sold to initial buyers by the borrowing firm 
D)  a market where you can sell any stocks you own as a private investor 
A)  a market where primary inputs like steel are sold 
B)  a market where you can sell any bonds you own as a private investor 
C)  a market where newly issued claims are sold to initial buyers by the borrowing firm 
D)  a market where you can sell any stocks you own as a private investor

Question 20

Who operates and controls a corporation in its day-to-day activities?

Accepted Answer

A)  the board of directors 
B)  stockholders 
C)  employees 
D)  management 
A)  the board of directors 
B)  stockholders 
C)  employees 
D)  management

Which of the following is not an advantage of starting a new business as a sole proprietorship?

If top managers make good decisions,the firm's profits will be ,and the firms assets will be .

Tommy's Teddy Bears incurs $300,000 per year in explicit costs and $50,000 in implicit costs.The shop earns $600,000 in revenues and has $1.1 million in net worth.Based on this information,what is accounting profit for Tommy's Teddy Bears?

The only type of business that faces unlimited liability is a sole proprietorship.

Anita is the retired president of Claddagh College and currently serves on the board of directors of the Patrician Pharmaceutical Company.Anita is considered ________ of the company.

Define a partnership.

A corporation is owned by its

If a corporate bond with face value of $5,000 has an interest rate of 4 percent paid once a year for a term of 30 years,what is the size of the coupon payment?

As a business type,corporations ________ in the United States.

An asset is anything of value owned by a person or firm.

What is shown on a firm's income statement?

Tommy's Teddy Bears incurs $300,000 per year in explicit costs and $50,000 in implicit costs.The shop earns $600,000 in revenues and has $1.1 million in net worth.Based on this information,what is economic profit for Tommy's Teddy Bears?

The three most widely followed stock indexes in the United States include all of the following except

When a business is set up as a sole proprietorship,the owner of the business faces limited liability.

How can a proprietorship or partnership raise funds for expansion?

In the United States,________ percent of all firms are partnerships.

The shareholders of a corporation

What is a primary market?

Who operates and controls a corporation in its day-to-day activities?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters

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

Which of the following is not an advantage of starting a new business as a sole proprietorship?

If top managers make good decisions,the firm's profits will be ________,and the firms assets will be ________.

Tommy's Teddy Bears incurs $300,000 per year in explicit costs and $50,000 in implicit costs.The shop earns $600,000 in revenues and has $1.1 million in net worth.Based on this information,what is accounting profit for Tommy's Teddy Bears?

The only type of business that faces unlimited liability is a sole proprietorship.

Anita is the retired president of Claddagh College and currently serves on the board of directors of the Patrician Pharmaceutical Company.Anita is considered ________ of the company.

Define a partnership.

A corporation is owned by its

If a corporate bond with face value of $5,000 has an interest rate of 4 percent paid once a year for a term of 30 years,what is the size of the coupon payment?

As a business type,corporations ________ in the United States.

An asset is anything of value owned by a person or firm.

What is shown on a firm's income statement?

Tommy's Teddy Bears incurs $300,000 per year in explicit costs and $50,000 in implicit costs.The shop earns $600,000 in revenues and has $1.1 million in net worth.Based on this information,what is economic profit for Tommy's Teddy Bears?

The three most widely followed stock indexes in the United States include all of the following except

When a business is set up as a sole proprietorship,the owner of the business faces limited liability.

How can a proprietorship or partnership raise funds for expansion?

In the United States,________ percent of all firms are partnerships.

The shareholders of a corporation

What is a primary market?

Who operates and controls a corporation in its day-to-day activities?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Market Efficiency and Market Failure

The Economics of Health Care

Consumer Choice and Elasticity

Technology,Production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money,Banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, International Trade, and Exchange Rates

Filters

If top managers make good decisions,the firm's profits will be ,and the firms assets will be .