Question 1

When Acme, Inc. produces a certain amount of output at least cost, Acme, Inc. definitely

Accepted Answer

A)  achieves economic efficiency. 
B)  uses more capital than labor. 
C)  earns a normal profit. 
D)  None of the above is true. 
A)  achieves economic efficiency. 
B)  uses more capital than labor. 
C)  earns a normal profit. 
D)  None of the above is true.

Question 2

What is an incentive system?

Accepted Answer

An incentive system is a method of organ

Question 3

When bank tellers converse with each other, keeping customers waiting in line, they are

Accepted Answer

A)  unemployed. 
B)  out of the labor force. 
C)  working in the best interest of the agent. 
D)  working in the best interest of the principals. 
A)  unemployed. 
B)  out of the labor force. 
C)  working in the best interest of the agent. 
D)  working in the best interest of the principals.

Question 4

Which of the following are two components of the opportunity cost of using capital already owned by the firm?

Accepted Answer

A)  economic profit and normal profit 
B)  implicit rental rate and economic profit 
C)  explicit rental rate and economic costs 
D)  economic depreciation and forgone interest 
A)  economic profit and normal profit 
B)  implicit rental rate and economic profit 
C)  explicit rental rate and economic costs 
D)  economic depreciation and forgone interest

Question 5

A firm's basic goal is best described as

Accepted Answer

A)  maximizing total revenue. 
B)  maximizing sales. 
C)  maximizing profit. 
D)  minimizing total cost. 
A)  maximizing total revenue. 
B)  maximizing sales. 
C)  maximizing profit. 
D)  minimizing total cost.

Question 6

Even though the market for bricks has a low concentration ratio nationally, the U.S. Justice Department might still scrutinize any mergers in this industry because the

Accepted Answer

A)  HHI is high nationally. 
B)  HHI is above 1800 nationally. 
C)  HHI is below 1800 nationally. 
D)  market is regional not national, and the regional concentration might be high. 
A)  HHI is high nationally. 
B)  HHI is above 1800 nationally. 
C)  HHI is below 1800 nationally. 
D)  market is regional not national, and the regional concentration might be high.

Question 7

Suppose Pippi buys an oven for her pizza parlor for $100,000. Pippi's pizza tasted so pitiful she went out of business 12 months later. She was able to sell the pizza oven for $75,000. This decrease in the value of the oven is

Accepted Answer

A)  the total implicit rental rate on the oven. 
B)  an economic loss. 
C)  economic depreciation. 
D)  interest forgone. 
A)  the total implicit rental rate on the oven. 
B)  an economic loss. 
C)  economic depreciation. 
D)  interest forgone.

Question 8

-The cookie industry in Eatsweetland consists of 15 firms. The industry sales are $80 million per month. The sales of the largest 5 firms are shown in the table below. The rest 10 firms have sales of $3 million each. Which of the following best describes the structure of the market for cookies in Eatsweetland?

Accepted Answer

A)  perfect competition 
B)  monopolistic competition 
C)  oligopoly 
D)  monopoly 
A)  perfect competition 
B)  monopolistic competition 
C)  oligopoly 
D)  monopoly

Question 9

A command system is a method of organizing production that

Accepted Answer

A)  uses a market-like mechanism inside the firm. 
B)  relies on competitive markets. 
C)  uses a managerial hierarchy. 
D)  uses incentives most extensively. 
A)  uses a market-like mechanism inside the firm. 
B)  relies on competitive markets. 
C)  uses a managerial hierarchy. 
D)  uses incentives most extensively.

Question 10

It was more than a century ago that an engineer named Frederick Taylor walked into factories and starting timing workers with a stop watch. He dissected their movements, and organized them more efficiently. He turned factory production into a science. Suppose work was completed in the factory based on what the floor manager decided and workers were paid a flat daily wage. How does this firm organize production?

Accepted Answer

A)  through the incentive system 
B)  through the command system 
C)  through a mixed command and incentive system 
D)  through the market system 
A)  through the incentive system 
B)  through the command system 
C)  through a mixed command and incentive system 
D)  through the market system

Question 11

An example of the principal-agent problem is when

Accepted Answer

A)  managers try to cope with employees that are inefficient. 
B)  proprietors don't receive any money payment for their entrepreneurial skills. 
C)  managers devise penalties that eliminate employee waste. 
D)  managers devise incentives that encourage employees to act in the owner's behalf. 
A)  managers try to cope with employees that are inefficient. 
B)  proprietors don't receive any money payment for their entrepreneurial skills. 
C)  managers devise penalties that eliminate employee waste. 
D)  managers devise incentives that encourage employees to act in the owner's behalf.

Question 12

Tudor's Deli and Catering could have sold their delivery van on December 31, 2010 for $16,000. If they could sell the same van on December 31, 2011, for $13,000, then the economic depreciation in 2011 for this van

Accepted Answer

A)  is $13,000. 
B)  is $16,000. 
C)  is $29,000. 
D)  is $3,000. 
A)  is $13,000. 
B)  is $16,000. 
C)  is $29,000. 
D)  is $3,000.

Question 13

-The cookie industry in Eatsweetland consists of 15 firms. The industry sales are $80 million per month. The sales of the largest 5 firms are shown in the table below. The rest 10 firms have sales of $3 million each. What is the Herfindahl-Hirschman index in the market for cookies in Eatsweetland?

Accepted Answer

A)  1013 
B)  2278 
C)  872 
D)  2632 
A)  1013 
B)  2278 
C)  872 
D)  2632

Question 14

Which of the following costs are part of a firm's opportunity costs? I. costs for resources bought in markets
II) costs for resources the firm owns
III) costs for resources supplied by the owner

Accepted Answer

A)  I and II 
B)  I and III 
C)  I only 
D)  I, II, and III 
A)  I and II 
B)  I and III 
C)  I only 
D)  I, II, and III

Question 15

One of the reasons that a firm can be ________ efficient than a market is that the firm ________.

Accepted Answer

A)  more; does not have any economies of scale 
B)  more; lowers transactions costs 
C)  less; has economies of scope 
D)  less; produces lower profits 
A)  more; does not have any economies of scale 
B)  more; lowers transactions costs 
C)  less; has economies of scope 
D)  less; produces lower profits

Question 16

-Based on the above table, which shows the firms and sales in an industry, what is the four-firm concentration ratio?

Accepted Answer

A)  55 
B)  74 
C)  100 
D)  $740 million 
A)  55 
B)  74 
C)  100 
D)  $740 million

Question 17

In the personal computer (PC) market in the first half of 2008, Hewlett-Packard maintained its worldwide No. 1 ranking at a market share of 19.1 percent. Dell's market share was 16 percent, Acer held onto third place with a 9.5 percent share, and Lenovo maintained fourth place with a 7.9 percent share. Predict the range of the Herfindahl-Hirschman Index for the PC market.

Accepted Answer

A)  0 - 100 
B)  100 - 999 
C)  10,000 
D)  800 - 1,200 
A)  0 - 100 
B)  100 - 999 
C)  10,000 
D)  800 - 1,200

Question 18

A large part of the principal-agent problem stems from the desire of

Accepted Answer

A)  agents to work hard. 
B)  agents to avoid working. 
C)  principals to work hard. 
D)  principals to avoid working. 
A)  agents to work hard. 
B)  agents to avoid working. 
C)  principals to work hard. 
D)  principals to avoid working.

Question 19

If there are five firms in an industry, each with a market share of 20 percent, the Herfindahl-Hirschman Index (HHI) of concentration is

Accepted Answer

A)  2000. 
B)  400. 
C)  100. 
D)  20. 
A)  2000. 
B)  400. 
C)  100. 
D)  20.

Question 20

Proprietorships, partnerships, and corporations are the primary forms of

Accepted Answer

A)  industries. 
B)  business organization. 
C)  principal-agent relationships. 
D)  command-incentive relationships. 
A)  industries. 
B)  business organization. 
C)  principal-agent relationships. 
D)  command-incentive relationships.

When Acme, Inc. produces a certain amount of output at least cost, Acme, Inc. definitely

What is an incentive system?

When bank tellers converse with each other, keeping customers waiting in line, they are

Which of the following are two components of the opportunity cost of using capital already owned by the firm?

A firm's basic goal is best described as

Even though the market for bricks has a low concentration ratio nationally, the U.S. Justice Department might still scrutinize any mergers in this industry because the

Suppose Pippi buys an oven for her pizza parlor for $100,000. Pippi's pizza tasted so pitiful she went out of business 12 months later. She was able to sell the pizza oven for $75,000. This decrease in the value of the oven is

A command system is a method of organizing production that

An example of the principal-agent problem is when

Tudor's Deli and Catering could have sold their delivery van on December 31, 2010 for $16,000. If they could sell the same van on December 31, 2011, for $13,000, then the economic depreciation in 2011 for this van

-The cookie industry in Eatsweetland consists of 15 firms. The industry sales are $80 million per month. The sales of the largest 5 firms are shown in the table below. The rest 10 firms have sales of $3 million each. What is the Herfindahl-Hirschman index in the market for cookies in Eatsweetland?

Which of the following costs are part of a firm's opportunity costs? I. costs for resources bought in markets II) costs for resources the firm owns III) costs for resources supplied by the owner

One of the reasons that a firm can be efficient than a market is that the firm .

-Based on the above table, which shows the firms and sales in an industry, what is the four-firm concentration ratio?

A large part of the principal-agent problem stems from the desire of

If there are five firms in an industry, each with a market share of 20 percent, the Herfindahl-Hirschman Index (HHI) of concentration is

Proprietorships, partnerships, and corporations are the primary forms of

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 10: Organizing Production

When Acme, Inc. produces a certain amount of output at least cost, Acme, Inc. definitely

What is an incentive system?

When bank tellers converse with each other, keeping customers waiting in line, they are

Which of the following are two components of the opportunity cost of using capital already owned by the firm?

A firm's basic goal is best described as

Even though the market for bricks has a low concentration ratio nationally, the U.S. Justice Department might still scrutinize any mergers in this industry because the

Suppose Pippi buys an oven for her pizza parlor for $100,000. Pippi's pizza tasted so pitiful she went out of business 12 months later. She was able to sell the pizza oven for $75,000. This decrease in the value of the oven is

A command system is a method of organizing production that

An example of the principal-agent problem is when

Tudor's Deli and Catering could have sold their delivery van on December 31, 2010 for $16,000. If they could sell the same van on December 31, 2011, for $13,000, then the economic depreciation in 2011 for this van

-The cookie industry in Eatsweetland consists of 15 firms. The industry sales are $80 million per month. The sales of the largest 5 firms are shown in the table below. The rest 10 firms have sales of $3 million each. What is the Herfindahl-Hirschman index in the market for cookies in Eatsweetland?

Which of the following costs are part of a firm's opportunity costs? I. costs for resources bought in markets II) costs for resources the firm owns III) costs for resources supplied by the owner

One of the reasons that a firm can be ________ efficient than a market is that the firm ________.

-Based on the above table, which shows the firms and sales in an industry, what is the four-firm concentration ratio?

A large part of the principal-agent problem stems from the desire of

If there are five firms in an industry, each with a market share of 20 percent, the Herfindahl-Hirschman Index (HHI) of concentration is

Proprietorships, partnerships, and corporations are the primary forms of

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

One of the reasons that a firm can be efficient than a market is that the firm .