Exam 10: Organizing Production

-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

The accountant for Muzhi's Sushi claims that Muzhi has accomplished "technological efficiency." This means that Muzhi's Sushi

The stockholders of a corporation have ________ liability and ________ required to pay all of the firm's losses.

What is the Herfindahl-Hirschman Index and what does it measure?

-Listed in the above table are the market shares for the firms in two different industries. Each industry has only eleven firms. Find the four-firm concentration ratio and the Herfindahl-Hirschman Index for each industry.

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 workers were paid a wage based on how much they produced. How does this firm organize production?

-The table above lists the market shares of the twenty makers of personal computers. Based upon the Herfindahl-Hirschman Index,

-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

Proprietorships generally have unlimited liability, whereas partnerships and corporations have limited liability.

Mr. Adams owns a textile business. In order to deal with the principal-agent problem, Mr. Adams might offer his employees

Which of the following is true?

Heidi quit her job as a chef making $40,000 per year to start her own restaurant. The first year, Heidi's restaurant earned $100,000 in revenue. Heidi pays $50,000 per year in wages to the waitresses and hostess and $20,000 per year to buy food. What is Heidi's profit as measured by an accountant for the year?

The minimum value of the Herfindahl-Hirschman Index is

The difference between the market price of a new car used by a firm and the market price of the same car one year later is known as

An advantage of a partnership over a corporation is that

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

The possibility that the managers of a corporation might not always act in the best interest of its owners is an example of the principal-agent problem.

Which of the following may yield economies of team production for Jitters Coffee Company, Inc.?

Bud opened a flower shop. He rented a building for $9,000 a year. To buy equipment for the store, he withdrew $10,000 from his savings account, which earned an annual interest rate of 3 percent. During the first year of operation, Bud paid $4,000 for utilities and $12,000 to his suppliers. The store's total annual revenue was $55,000. The market value of the store's equipment at the end of the year was $8,000. If Bud had not started this business, he would have continued to work as an employee at another flower shop for $30,000 a year. What was Bud's opportunity cost of running his business?

The principal-agent problem incentivizes management to