Question 1

The implicit rental rate for capital is

Accepted Answer

A)  an accounting cost. 
B)  part of the firm's normal profit. 
C)  an opportunity cost. 
D)  a cost that is irrelevant to the business. 
A)  an accounting cost. 
B)  part of the firm's normal profit. 
C)  an opportunity cost. 
D)  a cost that is irrelevant to the business.

Question 2

The owner of a proprietorship might decide incorporate the firm as a corporation in order to

Accepted Answer

A)  be able to conduct business in more than one county. 
B)  avoid the principal-agent problem. 
C)  be eligible for patent protection of new products. 
D)  gain limited liability. 
A)  be able to conduct business in more than one county. 
B)  avoid the principal-agent problem. 
C)  be eligible for patent protection of new products. 
D)  gain limited liability.

Question 3

-The above table shows the market shares for all the landscaping services in a suburban area. Which of the following mergers would cause the greatest increase in the four-firm concentration ratio?

Accepted Answer

A)  A and B 
B)  D and E 
C)  E and F 
D)  six of the smallest firms 
A)  A and B 
B)  D and E 
C)  E and F 
D)  six of the smallest firms

Question 4

What would be an example of economies of scope achieved in the automobile insurance industry?

Accepted Answer

The auto insurance industry can achieve

Question 5

Which of the following firms has unlimited liability?

Accepted Answer

A)  only proprietorships 
B)  only partnerships 
C)  only corporations 
D)  both proprietorships and partnerships 
A)  only proprietorships 
B)  only partnerships 
C)  only corporations 
D)  both proprietorships and partnerships

Question 6

-The table above shows four methods for producing 10 computer desks a day. Of the four methods, ________ technologically inefficient.

Accepted Answer

A)  B and C are 
B)  B is 
C)  D is 
D)  A and B are 
A)  B and C are 
B)  B is 
C)  D is 
D)  A and B are

Question 7

Technological efficiency occurs when the firm produces a given output by using the least amount of inputs.

Accepted Answer

A) True 
 B)False

Question 8

Methods for making 2,000 CDs per day  
-In the table above, if the cost of capital is $20 per day and an hour of labor is $15 per day, which method is economically efficient?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 9

-Based on the above table, which shows the firms and sales in an industry, what is the approximate value of the Herfindahl-Hirschman Index?

Accepted Answer

A)  1,660 
B)  2,300 
C)  4,800 
D)  10,000 
A)  1,660 
B)  2,300 
C)  4,800 
D)  10,000

Question 10

In a given market, a large number of firms sell a similar product. Consumers think that each firm's product is somewhat different from that of its competitors. This market is

Accepted Answer

A)  perfectly competitive. 
B)  monopolistically competitive. 
C)  equivalent to a monopoly because consumers think the products are different. 
D)  equivalent to an oligopoly because consumers think the products are different. 
A)  perfectly competitive. 
B)  monopolistically competitive. 
C)  equivalent to a monopoly because consumers think the products are different. 
D)  equivalent to an oligopoly because consumers think the products are different.

Question 11

Compared to corporations, businesses that are proprietorships

Accepted Answer

A)  are far more numerous. 
B)  account for a larger percentage of the economy's total revenue each year. 
C)  can raise capital more cheaply. 
D)  All of the above are correct answers. 
A)  are far more numerous. 
B)  account for a larger percentage of the economy's total revenue each year. 
C)  can raise capital more cheaply. 
D)  All of the above are correct answers.

Question 12

Sue owns a baking company. The company's total revenue for a month is $4000. The monthly costs of resources bought in the market and of resources owned by the firm are $2000 and monthly costs of resources supplied by the owner are $1000. Sue's economic profit for the month is equal to

Accepted Answer

A)  $4000. 
B)  $3000. 
C)  $2000. 
D)  $1000. 
A)  $4000. 
B)  $3000. 
C)  $2000. 
D)  $1000.

Question 13

What is the major advantage of the corporate form of business organization?

Accepted Answer

A)  Its owners have limited liability. 
B)  Its owners have unlimited liability. 
C)  Its profits are not taxed. 
D)  Its profits are taxed twice. 
A)  Its owners have limited liability. 
B)  Its owners have unlimited liability. 
C)  Its profits are not taxed. 
D)  Its profits are taxed twice.

Question 14

Can a firm achieve technological efficiency without achieving economic efficiency?

Accepted Answer

Yes. Technological efficiency means achi

Question 15

What is a firm?

Accepted Answer

A firm is an institution that

Question 16

Which of the following are characteristics of a proprietorship? I. Single owner
II) Limited liability

Accepted Answer

A)  I only 
B)  II only 
C)  both I and II 
D)  neither I nor II 
A)  I only 
B)  II only 
C)  both I and II 
D)  neither I nor II

Question 17

What is a normal profit? Is it part of the firm's opportunity costs, total revenue, or neither?

Accepted Answer

The normal profit is

Question 18

Which of the following is NOT an advantage of firm coordination of economic activity?

Accepted Answer

A)  Firm coordination decreases transactions costs. 
B)  When firms coordinate economic activity, there are no opportunity costs. 
C)  Firms can take advantage of the economies of team production. 
D)  Economies of scope can be realized by firms that produce a range of goods and services that share specialized resources. 
A)  Firm coordination decreases transactions costs. 
B)  When firms coordinate economic activity, there are no opportunity costs. 
C)  Firms can take advantage of the economies of team production. 
D)  Economies of scope can be realized by firms that produce a range of goods and services that share specialized resources.

Question 19

-The above table gives techniques that Fatz confectionery can use to produce 2,000 pounds of candy. If the cost of capital is $20 per unit and the cost of labor is $40 per unit, the economically efficient technique for producing 2000 pounds of candy is

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 20

-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. The U.S. Department of Justice would classify the market for cookies in Eatsweetland as

Accepted Answer

A)  competitive. 
B)  uncompetitive. 
C)  moderately competitive. 
D)  monopolistic. 
A)  competitive. 
B)  uncompetitive. 
C)  moderately competitive. 
D)  monopolistic.

The implicit rental rate for capital is

The owner of a proprietorship might decide incorporate the firm as a corporation in order to

-The above table shows the market shares for all the landscaping services in a suburban area. Which of the following mergers would cause the greatest increase in the four-firm concentration ratio?

What would be an example of economies of scope achieved in the automobile insurance industry?

Which of the following firms has unlimited liability?

-The table above shows four methods for producing 10 computer desks a day. Of the four methods, ________ technologically inefficient.

Technological efficiency occurs when the firm produces a given output by using the least amount of inputs.

Methods for making 2,000 CDs per day -In the table above, if the cost of capital is $20 per day and an hour of labor is $15 per day, which method is economically efficient?

-Based on the above table, which shows the firms and sales in an industry, what is the approximate value of the Herfindahl-Hirschman Index?

In a given market, a large number of firms sell a similar product. Consumers think that each firm's product is somewhat different from that of its competitors. This market is

Compared to corporations, businesses that are proprietorships

Sue owns a baking company. The company's total revenue for a month is $4000. The monthly costs of resources bought in the market and of resources owned by the firm are $2000 and monthly costs of resources supplied by the owner are $1000. Sue's economic profit for the month is equal to

What is the major advantage of the corporate form of business organization?

Can a firm achieve technological efficiency without achieving economic efficiency?

What is a firm?

Which of the following are characteristics of a proprietorship? I. Single owner II) Limited liability

What is a normal profit? Is it part of the firm's opportunity costs, total revenue, or neither?

Which of the following is NOT an advantage of firm coordination of economic activity?

-The above table gives techniques that Fatz confectionery can use to produce 2,000 pounds of candy. If the cost of capital is $20 per unit and the cost of labor is $40 per unit, the economically efficient technique for producing 2000 pounds of candy is

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

The implicit rental rate for capital is

The owner of a proprietorship might decide incorporate the firm as a corporation in order to

-The above table shows the market shares for all the landscaping services in a suburban area. Which of the following mergers would cause the greatest increase in the four-firm concentration ratio?

What would be an example of economies of scope achieved in the automobile insurance industry?

Which of the following firms has unlimited liability?

-The table above shows four methods for producing 10 computer desks a day. Of the four methods, ________ technologically inefficient.

Technological efficiency occurs when the firm produces a given output by using the least amount of inputs.

Methods for making 2,000 CDs per day -In the table above, if the cost of capital is $20 per day and an hour of labor is $15 per day, which method is economically efficient?

-Based on the above table, which shows the firms and sales in an industry, what is the approximate value of the Herfindahl-Hirschman Index?

In a given market, a large number of firms sell a similar product. Consumers think that each firm's product is somewhat different from that of its competitors. This market is

Compared to corporations, businesses that are proprietorships

Sue owns a baking company. The company's total revenue for a month is $4000. The monthly costs of resources bought in the market and of resources owned by the firm are $2000 and monthly costs of resources supplied by the owner are $1000. Sue's economic profit for the month is equal to

What is the major advantage of the corporate form of business organization?

Can a firm achieve technological efficiency without achieving economic efficiency?

What is a firm?

Which of the following are characteristics of a proprietorship? I. Single owner II) Limited liability

What is a normal profit? Is it part of the firm's opportunity costs, total revenue, or neither?

Which of the following is NOT an advantage of firm coordination of economic activity?

-The above table gives techniques that Fatz confectionery can use to produce 2,000 pounds of candy. If the cost of capital is $20 per unit and the cost of labor is $40 per unit, the economically efficient technique for producing 2000 pounds of candy is

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