Exam 10: Organizing Production

Gilda's Art Gallery pays a commission to her sales people when they sell a painting. This practice is known as

Production Information forScully's Splendid Spacecrafts -In the above table, which technique is technologically inefficient?

Gilda's Art Gallery rewards its employees with stock each year the gallery makes profits. This stock allows the employees to own part of the gallery. This practice is known as

Which of the following forms of business organization is likely to suffer most from the principal agent problem between the owners and managers of the business?

Sheila's Sports Shop is a very popular sporting goods store, which has a yearly revenue of $600,000. Sheila runs the business herself. Her alternative employment options are to be a college swimming coach for $50,000 per year or a construction worker for $40,000 per year. Sheila spends $230,000 purchasing goods for resale to her customers. She also has four employees, who each earn $25,000 per year. Sheila owns the building that her Sports Shop is housed in and she could have rented it out for $20,000 per year. Sheila's costs for resources bought in the market equal

The Roomba 570 is a robotic vacuum cleaner made and sold by iRobot. It can vacuum 4 rooms on a single battery charge and it costs $2 worth of electricity to charge the Roomba. Lynn is a house cleaner and can vacuum 4 rooms in 1 hour with a traditional vacuum. Suppose you want the 4 rooms in your house vacuumed once a week for one year. Ignoring the cost of any electricity Lynn uses, which method is economically efficient if Lynn charges $20 per hour? $30 per hour?

An incentive system is a

Which of the following statements pertains to the four-firm concentration ratio? I. It is the percentage of the value of sales accounted for by the four largest firms in an industry. II) A high concentration ratio is indicative of a high degree of competition. III) The ratio is used to measure product differentiation.

A normal profit is

Coca Cola and Pepsi, which together account for about 85 percent of the soft drink market, are best described as being in

A market structure in which many firms are selling an identical product is called

Taco Bell produces both tacos and burritos because when it does so, Taco Bell experiences

Which types of firms have limited liability?

Where large amounts of capital are used, the dominant form of business organization is the

A firm that has limited liability is classified as a

Kris wants to purchase a house. She buys newspapers to read the classified advertisements and spends her evenings with realtors looking at houses. Kris has incurred the ________ costs of making a purchase.

Owners of a proprietorship have ________ liability and stockholders in a corporation have ________.

Mr. Sweet opened a candy store. He rented a building for $30,000 a year. During the first year of operation, Sweet paid $40,000 to his employees, $10,000 for utilities, and $20,000 for goods he bought from other firms. His total revenue was $135,000. Sweet's best alternative to running this candy store is to work for Wal-Mart as a sales associate for $15,000 a year. What is Sweet's economic profit?

Profit maximization

Suppose there are five firms in the disposable diaper market. Hug-Me's share is 30 percent. Plumper's share is 30 percent. Drippy's share is 20 percent. Kool Kid's share is 10 percent. Nappomatic's share is 10 percent. The Herfindahl-Hirschman Index in this industry is