Question 1

Securities dealers that trade stocks and bonds ________ comprise the over-the-counter market.

Accepted Answer

A)  directly instead of electronically 
B)  outside exchanges 
C)  that have previously been sold 
D)  valued at less than $1 each 
A)  directly instead of electronically 
B)  outside exchanges 
C)  that have previously been sold 
D)  valued at less than $1 each

Question 2

In the early 1800s,many state legislatures began to pass general incorporation laws,which

Accepted Answer

A)  allowed firms to more easily be organized as corporations. 
B)  made it harder for firms to organize as corporations. 
C)  granted sole proprietorships and partnerships limited personal liability. 
D)  allowed sole proprietorships and partnerships to issue stock. 
A)  allowed firms to more easily be organized as corporations. 
B)  made it harder for firms to organize as corporations. 
C)  granted sole proprietorships and partnerships limited personal liability. 
D)  allowed sole proprietorships and partnerships to issue stock.

Question 3

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 4

Torrie is thinking of starting up a small business selling hand-painted wine glasses.She is considering setting up her business as a sole proprietorship.What is one disadvantage to Torrie of setting up her business as a sole proprietorship?

Accepted Answer

A)  As a sole proprietor, Torrie would be taxed twice. 
B)  As a sole proprietor, Torrie would not have control of the business. 
C)  As a sole proprietor, Torrie would face unlimited liability. 
D)  As a sole proprietor, Torrie would be subject to significant rules and regulations. 
A)  As a sole proprietor, Torrie would be taxed twice. 
B)  As a sole proprietor, Torrie would not have control of the business. 
C)  As a sole proprietor, Torrie would face unlimited liability. 
D)  As a sole proprietor, Torrie would be subject to significant rules and regulations.

Question 5

What is a corporate bond and what does it specify?

Accepted Answer

A bond is a promise to repay a

Question 6

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

Accepted Answer

A)  4 
B)  14 
C)  72 
D)  82 
A)  4 
B)  14 
C)  72 
D)  82

Question 7

One of the most widely followed stock indexes in the United States is the S&P 500.This index represents

Accepted Answer

A)  the stock prices of 500 large U.S. firms. 
B)  the stock prices of the 500 most valuable firms worldwide. 
C)  the stock prices of more than 4,000 U.S. firms. 
D)  the stock prices of 30 large U.S. corporations. 
A)  the stock prices of 500 large U.S. firms. 
B)  the stock prices of the 500 most valuable firms worldwide. 
C)  the stock prices of more than 4,000 U.S. firms. 
D)  the stock prices of 30 large U.S. corporations.

Question 8

Laura's Pizza Place incurs $800,000 per year in explicit costs and $100,000 in implicit costs.The restaurant earns $1.3 million in revenues.Based on this information,what is the accounting profit for Laura's Pizza Place?

Accepted Answer

A)  $200,000 
B)  $400,000 
C)  $500,000 
D)  $900,000 
A)  $200,000 
B)  $400,000 
C)  $500,000 
D)  $900,000

Question 9

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

Accepted Answer

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

Question 10

Organizing a successful firm in a market economy has become ________ over the last century.

Accepted Answer

A)  legally impossible 
B)  politically impossible 
C)  less difficult 
D)  more difficult 
A)  legally impossible 
B)  politically impossible 
C)  less difficult 
D)  more difficult

Question 11

A corporation's board of directors

Accepted Answer

A)  hire the managers of the corporation. 
B)  control the day-to-day activities of the corporation. 
C)  are personally liable for the debts of the corporation. 
D)  are the sole owners of the corporation. 
A)  hire the managers of the corporation. 
B)  control the day-to-day activities of the corporation. 
C)  are personally liable for the debts of the corporation. 
D)  are the sole owners of the corporation.

Question 12

How do the owners of a corporation relate to the business?

Accepted Answer

A)  The owners and the business are not separate legal entities. 
B)  The owners and the business are separate legal entities. 
C)  The assets of the owners are considered the same as the assets of the business. 
D)  None of these describe the legal relationship of the owners to the business. 
A)  The owners and the business are not separate legal entities. 
B)  The owners and the business are separate legal entities. 
C)  The assets of the owners are considered the same as the assets of the business. 
D)  None of these describe the legal relationship of the owners to the business.

Question 13

Gross revenue minus explicit and implicit costs is equal to

Accepted Answer

A)  accounting profit. 
B)  opportunity cost. 
C)  economic profit. 
D)  net worth. 
A)  accounting profit. 
B)  opportunity cost. 
C)  economic profit. 
D)  net worth.

Question 14

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 15

Economists refer to the conflict between the interests of shareholders and the interests of top management as

Accepted Answer

A)  a stock-equity problem. 
B)  a liability problem. 
C)  a principal-agent problem. 
D)  a financial intermediary problem. 
A)  a stock-equity problem. 
B)  a liability problem. 
C)  a principal-agent problem. 
D)  a financial intermediary problem.

Question 16

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

Accepted Answer

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

Question 17

The coupon rate of a bond is equal to

Accepted Answer

A)  the coupon payment. 
B)  the interest payment. 
C)  the interest rate. 
D)  the face value. 
A)  the coupon payment. 
B)  the interest payment. 
C)  the interest rate. 
D)  the face value.

Question 18

Because a firm has implicit costs as well as explicit costs

Accepted Answer

A)  its economic profit is usually the same as its accounting profit. 
B)  its accounting profit is always less than its economic profit. 
C)  its economic profit is usually more than its accounting profit. 
D)  its economic profit is usually less than its accounting profit. 
A)  its economic profit is usually the same as its accounting profit. 
B)  its accounting profit is always less than its economic profit. 
C)  its economic profit is usually more than its accounting profit. 
D)  its economic profit is usually less than its accounting profit.

Question 19

Public companies ________ and private companies ________.

Accepted Answer

A)  sell stock in financial markets; also sell stock in financial markets 
B)  sell stock in financial markets; do not sell stock in financial markets 
C)  do not sell stock in financial markets; also do not sell stock in financial markets 
D)  do not sell stock in financial markets; sell stock in financial markets 
A)  sell stock in financial markets; also sell stock in financial markets 
B)  sell stock in financial markets; do not sell stock in financial markets 
C)  do not sell stock in financial markets; also do not sell stock in financial markets 
D)  do not sell stock in financial markets; sell stock in financial markets

Question 20

Humberto is the chief operational officer (COO)of the SodaSopa Company and currently serves on the board of directors of the Helium Company of America.Humberto is considered ________ of the Helium Company of America.

Accepted Answer

A)  a managing director 
B)  an inside director 
C)  an unpaid advisor 
D)  an outside director 
A)  a managing director 
B)  an inside director 
C)  an unpaid advisor 
D)  an outside director

Securities dealers that trade stocks and bonds ________ comprise the over-the-counter market.

In the early 1800s,many state legislatures began to pass general incorporation laws,which

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?

Torrie is thinking of starting up a small business selling hand-painted wine glasses.She is considering setting up her business as a sole proprietorship.What is one disadvantage to Torrie of setting up her business as a sole proprietorship?

What is a corporate bond and what does it specify?

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

One of the most widely followed stock indexes in the United States is the S&P 500.This index represents

Laura's Pizza Place incurs $800,000 per year in explicit costs and $100,000 in implicit costs.The restaurant earns $1.3 million in revenues.Based on this information,what is the accounting profit for Laura's Pizza Place?

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

Organizing a successful firm in a market economy has become ________ over the last century.

A corporation's board of directors

How do the owners of a corporation relate to the business?

Gross revenue minus explicit and implicit costs is equal to

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

Economists refer to the conflict between the interests of shareholders and the interests of top management as

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

The coupon rate of a bond is equal to

Because a firm has implicit costs as well as explicit costs

Public companies and private companies .

Humberto is the chief operational officer (COO)of the SodaSopa Company and currently serves on the board of directors of the Helium Company of America.Humberto is considered ________ of the Helium Company of America.

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

Securities dealers that trade stocks and bonds ________ comprise the over-the-counter market.

In the early 1800s,many state legislatures began to pass general incorporation laws,which

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?

Torrie is thinking of starting up a small business selling hand-painted wine glasses.She is considering setting up her business as a sole proprietorship.What is one disadvantage to Torrie of setting up her business as a sole proprietorship?

What is a corporate bond and what does it specify?

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

One of the most widely followed stock indexes in the United States is the S&P 500.This index represents

Laura's Pizza Place incurs $800,000 per year in explicit costs and $100,000 in implicit costs.The restaurant earns $1.3 million in revenues.Based on this information,what is the accounting profit for Laura's Pizza Place?

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

Organizing a successful firm in a market economy has become ________ over the last century.

A corporation's board of directors

How do the owners of a corporation relate to the business?

Gross revenue minus explicit and implicit costs is equal to

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

Economists refer to the conflict between the interests of shareholders and the interests of top management as

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

The coupon rate of a bond is equal to

Because a firm has implicit costs as well as explicit costs

Public companies ________ and private companies ________.

Humberto is the chief operational officer (COO)of the SodaSopa Company and currently serves on the board of directors of the Helium Company of America.Humberto is considered ________ of the Helium Company of America.

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

Public companies and private companies .