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

Tanesha sells homemade candles over the Internet.Her annual revenue is $64,000 per year,the explicit costs of her business are $17,000,and the opportunity costs of her business are $22,000.What is her accounting profit?

A corporation is the type of business has ________ government rules and regulations affecting it.

In addition to requiring that CEO's personally certify the accuracy of financial statements,the Sarbanes-Oxley Act of 2002 also requires that

The only type of business that faces limited liability is a corporation.

Which type of business is the most difficult to set up?

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 and has $5 million in net worth.Based on this information,what is economic profit for Laura's Pizza Place?

A firm's net income is also its

Compared to buying stock in a publicly-held firm,investing in a private firm

How do unlimited and limited liability differ?

An asset is

Which type of business has the least government rules and regulations affecting it?

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

When an investor buys a corporate bond,

Explain the relationships between a corporation's shareholders,its board of directors,and its top managers.

What is a primary market?

What is a corporate bond and what does it specify?

Explain what potential conflict exists between shareholders in a corporation and the corporation's managers.

Which of the following must a firm in a market economy do today to succeed?

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

In a typical year,________ of new jobs are created by small firms.