Question 1

Which of the following is an advantage of starting a new business as a sole proprietorship?

Accepted Answer

A) double taxation 
B) ease in setting up 
C) limited liability 
D) greater ability to raise funds 
A) double taxation 
B) ease in setting up 
C) limited liability 
D) greater ability to raise funds

Question 2

Which of the following is an advantage of starting a new business as a partnership?

Accepted Answer

A) The owners have limited personal liability. 
B) A partnership has few government rules and regulations to comply with. 
C) Business profits are not taxed. 
D) A partnership can easily attain additional funding. 
A) The owners have limited personal liability. 
B) A partnership has few government rules and regulations to comply with. 
C) Business profits are not taxed. 
D) A partnership can easily attain additional funding.

Question 3

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

Accepted Answer

A) 4 
B) 10 
C) 14 
D) 26 
A) 4 
B) 10 
C) 14 
D) 26

Question 4

If a firm has implicit costs as well as explicit costs,

Accepted Answer

A) net income will always be less than accounting profit. 
B) accounting profit will be zero. 
C) net income will always be greater than accounting profit. 
D) economic profit will be less than accounting profit. 
A) net income will always be less than accounting profit. 
B) accounting profit will be zero. 
C) net income will always be greater than accounting profit. 
D) economic profit will be less than accounting profit.

Question 5

Gross revenue minus explicit costs equals

Accepted Answer

A) accounting profit. 
B) economic profit. 
C) opportunity cost. 
D) implicit cost. 
A) accounting profit. 
B) economic profit. 
C) opportunity cost. 
D) implicit cost.

Question 6

Walmart wants to raise $250 million to finance the renovation of their retail stores,and the company wishes to raise the funds through indirect finance.Which of the following methods could it use?

Accepted Answer

A) It could issue $250 million in stock. 
B) It could sell $250 million in bonds. 
C) It could borrow $250 million from a bank. 
D) It could choose either A or B. 
A) It could issue $250 million in stock. 
B) It could sell $250 million in bonds. 
C) It could borrow $250 million from a bank. 
D) It could choose either A or B.

Question 7

The rules of accounting generally require that ________ be included in a firm's financial records.

Accepted Answer

A) only implicit costs 
B) only explicit costs 
C) both explicit costs and implicit costs 
D) neither explicit costs nor implicit costs 
A) only implicit costs 
B) only explicit costs 
C) both explicit costs and implicit costs 
D) neither explicit costs nor implicit costs

Question 8

Veruca sells therapeutic bath salts on the Internet.Her annual revenue is $52,000 per year,the explicit costs of her business are $14,000,and the opportunity costs of her business are $17,000 per year.What are the implicit costs of her business?

Accepted Answer

A) $14,000 
B) $17,000 
C) $21,000 
D) $31,000 
A) $14,000 
B) $17,000 
C) $21,000 
D) $31,000

Question 9

Sylvia wants to expand her taxidermy business and is going to use profits from the business to do so.This is an example of using ________ for her expansion.

Accepted Answer

A) direct finance 
B) indirect finance 
C) retained earnings 
D) dividends 
A) direct finance 
B) indirect finance 
C) retained earnings 
D) dividends

Question 10

In a public corporation,asymmetric information often results in a principal-agent problem between top management and ownership.What information would help to prevent this principal-agent problem?

Accepted Answer

Top managers know more about how the com

Question 11

A partnership is limited to how many owners?

Accepted Answer

A) 2 
B) 5 
C) less than 10 
D) There is no limit to the number of owners. 
A) 2 
B) 5 
C) less than 10 
D) There is no limit to the number of owners.

Question 12

Briefly describe the three most widely followed stock indexes in the United States.

Accepted Answer

1.The Dow Jones Industrial Average,which

Question 13

The Sarbanes-Oxley Act was passed in response to the 2007-2009 financial crisis.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is true?

Accepted Answer

A) A firm's accounting profit is equal to its economic profit. 
B) Opportunity costs are the same as explicit costs. 
C) A firm's net income is the same as its accounting profit. 
D) If a firm's accounting profits are positive,its economic profits must also be positive. 
A) A firm's accounting profit is equal to its economic profit. 
B) Opportunity costs are the same as explicit costs. 
C) A firm's net income is the same as its accounting profit. 
D) If a firm's accounting profits are positive,its economic profits must also be positive.

Question 15

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 16

How much is a bond that pays $40 in coupon payments for 2 years and $1,000 at the end of the fourth year worth if the interest rate is 4%?

Accepted Answer

A) $844.56 
B) $924.56 
C) $1,000 
D) $1,123.2 
A) $844.56 
B) $924.56 
C) $1,000 
D) $1,123.2

Question 17

Information in a firm's financial statements

Accepted Answer

A) helps the firm's managers make decisions. 
B) assists investors who are considering buying the firm's stock. 
C) guide resource allocation in the economy. 
D) all of the above 
A) helps the firm's managers make decisions. 
B) assists investors who are considering buying the firm's stock. 
C) guide resource allocation in the economy. 
D) all of the above

Question 18

As a form of business,a sole proprietorship

Accepted Answer

A) has limited liability. 
B) has more than one owner. 
C) cannot issue stock. 
D) has the most government rules and regulations affecting it. 
A) has limited liability. 
B) has more than one owner. 
C) cannot issue stock. 
D) has the most government rules and regulations affecting it.

Question 19

Unlike a sole proprietorship,a corporation's shareholders

Accepted Answer

A) own the firm and directly manage it as well. 
B) own the firm but do not directly manage it. 
C) do not own the firm but directly manage it. 
D) do not own the firm and do not directly manage it. 
A) own the firm and directly manage it as well. 
B) own the firm but do not directly manage it. 
C) do not own the firm but directly manage it. 
D) do not own the firm and do not directly manage it.

Question 20

Bonds ________ and stocks ________.

Accepted Answer

A) always pay interest payments forever;always pay dividends forever 
B) have a fixed number of interest payments;may pay dividends forever 
C) may pay interest payments forever;have a fixed number of dividend payments 
D) have a fixed number of interest payments;have a fixed number of dividend payments 
A) always pay interest payments forever;always pay dividends forever 
B) have a fixed number of interest payments;may pay dividends forever 
C) may pay interest payments forever;have a fixed number of dividend payments 
D) have a fixed number of interest payments;have a fixed number of dividend payments

Which of the following is an advantage of starting a new business as a sole proprietorship?

Which of the following is an advantage of starting a new business as a partnership?

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

If a firm has implicit costs as well as explicit costs,

Gross revenue minus explicit costs equals

Walmart wants to raise $250 million to finance the renovation of their retail stores,and the company wishes to raise the funds through indirect finance.Which of the following methods could it use?

The rules of accounting generally require that ________ be included in a firm's financial records.

Veruca sells therapeutic bath salts on the Internet.Her annual revenue is $52,000 per year,the explicit costs of her business are $14,000,and the opportunity costs of her business are $17,000 per year.What are the implicit costs of her business?

Sylvia wants to expand her taxidermy business and is going to use profits from the business to do so.This is an example of using ________ for her expansion.

In a public corporation,asymmetric information often results in a principal-agent problem between top management and ownership.What information would help to prevent this principal-agent problem?

A partnership is limited to how many owners?

Briefly describe the three most widely followed stock indexes in the United States.

The Sarbanes-Oxley Act was passed in response to the 2007-2009 financial crisis.

Which of the following is true?

Gross revenue minus explicit and implicit costs is equal to

How much is a bond that pays $40 in coupon payments for 2 years and $1,000 at the end of the fourth year worth if the interest rate is 4%?

Information in a firm's financial statements

As a form of business,a sole proprietorship

Unlike a sole proprietorship,a corporation's shareholders

Bonds and stocks .

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

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

Which of the following is an advantage of starting a new business as a sole proprietorship?

Which of the following is an advantage of starting a new business as a partnership?

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

If a firm has implicit costs as well as explicit costs,

Gross revenue minus explicit costs equals

Walmart wants to raise $250 million to finance the renovation of their retail stores,and the company wishes to raise the funds through indirect finance.Which of the following methods could it use?

The rules of accounting generally require that ________ be included in a firm's financial records.

Veruca sells therapeutic bath salts on the Internet.Her annual revenue is $52,000 per year,the explicit costs of her business are $14,000,and the opportunity costs of her business are $17,000 per year.What are the implicit costs of her business?

Sylvia wants to expand her taxidermy business and is going to use profits from the business to do so.This is an example of using ________ for her expansion.

In a public corporation,asymmetric information often results in a principal-agent problem between top management and ownership.What information would help to prevent this principal-agent problem?

A partnership is limited to how many owners?

Briefly describe the three most widely followed stock indexes in the United States.

The Sarbanes-Oxley Act was passed in response to the 2007-2009 financial crisis.

Which of the following is true?

Gross revenue minus explicit and implicit costs is equal to

How much is a bond that pays $40 in coupon payments for 2 years and $1,000 at the end of the fourth year worth if the interest rate is 4%?

Information in a firm's financial statements

As a form of business,a sole proprietorship

Unlike a sole proprietorship,a corporation's shareholders

Bonds ________ and stocks ________.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Bonds and stocks .