Question 1

Disruptive innovations

Accepted Answer

A) are created exclusively by start-up companies. 
B) can create new industries or destroy old ones. 
C) create oligopolies. 
D) are always based on sophisticated advances in technology. 
A) are created exclusively by start-up companies. 
B) can create new industries or destroy old ones. 
C) create oligopolies. 
D) are always based on sophisticated advances in technology. B

Question 2

The present value of a loan is the

Accepted Answer

A) amount of money the firm borrows today. 
B) amount of money the firm must earn to pay off the loan. 
C) future value plus interest. 
D) compounded value of the interest payments. 
A) amount of money the firm borrows today. 
B) amount of money the firm must earn to pay off the loan. 
C) future value plus interest. 
D) compounded value of the interest payments. A

Question 3

Supply chain management refers to

Accepted Answer

A) the contracts put in place to manage a firm's suppliers. 
B) the decisions around which stages of production to handle internally and which to buy from others. 
C) how the firm compensates the employees who work on the firm's internal stages of production. 
D) the 19th century practice of having barges move downstream with the flow of the river. 
A) the contracts put in place to manage a firm's suppliers. 
B) the decisions around which stages of production to handle internally and which to buy from others. 
C) how the firm compensates the employees who work on the firm's internal stages of production. 
D) the 19th century practice of having barges move downstream with the flow of the river. B

Question 4

A firm should always shut down if its revenue is

Accepted Answer

A) declining. 
B) less than its average fixed costs. 
C) less than its total costs. 
D) less than its avoidable costs. 
A) declining. 
B) less than its average fixed costs. 
C) less than its total costs. 
D) less than its avoidable costs.

Question 5

If the market price in a competitive market is below the minimum of average variable cost, the firm will shut down.

Accepted Answer

A) True 
 B)False

Question 6

A firm's vertical dimension refers to

Accepted Answer

A) its ability to grow its profits. 
B) the size of its headquarters building. 
C) the degree to which it participates in the various stages of producing the products and services it sells. 
D) the downstream stages of production. 
A) its ability to grow its profits. 
B) the size of its headquarters building. 
C) the degree to which it participates in the various stages of producing the products and services it sells. 
D) the downstream stages of production.

Question 7

Firms might vertically disintegrate when

Accepted Answer

A) it becomes more profitable for a firm to specialize. 
B) the IRS cracks down on transfer pricing. 
C) the industry becomes too large to support itself. 
D) the industry shrinks in size. 
A) it becomes more profitable for a firm to specialize. 
B) the IRS cracks down on transfer pricing. 
C) the industry becomes too large to support itself. 
D) the industry shrinks in size.

Question 8

If a firm makes zero economic profit, then the firm

Accepted Answer

A) has total revenues greater than its economic costs. 
B) must shut down. 
C) can be earning positive accounting profit. 
D) must have no fixed costs. 
A) has total revenues greater than its economic costs. 
B) must shut down. 
C) can be earning positive accounting profit. 
D) must have no fixed costs.

Question 9

A firm that is vertically integrated

Accepted Answer

A) participates in more than one successive stage of production. 
B) has higher profits than firms that are not vertically integrated. 
C) produces all of its own inputs. 
D) relies on other firms to market its products. 
A) participates in more than one successive stage of production. 
B) has higher profits than firms that are not vertically integrated. 
C) produces all of its own inputs. 
D) relies on other firms to market its products.

Question 10

A ________ is a governance structure where owners are not personally liable.

Accepted Answer

A) sole proprietorship 
B) partnership 
C) mixed enterprise 
D) corporation 
A) sole proprietorship 
B) partnership 
C) mixed enterprise 
D) corporation

Question 11

If a firm doesn't make an economic profit, it will shut down.

Accepted Answer

A) True 
 B)False

Question 12

Which entity produces the greatest proportion of U.S. gross domestic product?

Accepted Answer

A) government 
B) non-profit organizations such as hospitals 
C) firms 
D) universities 
A) government 
B) non-profit organizations such as hospitals 
C) firms 
D) universities

Question 13

-The above figure shows the cost curves for a competitive firm. The firm will incur economic losses if the price is less than

Accepted Answer

A) $0. 
B) $5. 
C) $10. 
D) $11. 
A) $0. 
B) $5. 
C) $10. 
D) $11.

Question 14

-The above figure shows the cost curves for a competitive firm. If the firm is to operate in the short run, price must exceed

Accepted Answer

A) $0. 
B) $5. 
C) $10. 
D) $11. 
A) $0. 
B) $5. 
C) $10. 
D) $11.

Question 15

Limited liability is a benefit available only to

Accepted Answer

A) sole proprietorships. 
B) partnerships. 
C) corporations. 
D) All of the above. 
A) sole proprietorships. 
B) partnerships. 
C) corporations. 
D) All of the above.

Question 16

A firm's horizontal dimension refers to

Accepted Answer

A) its size in its primary market. 
B) its size in all markets in which is competes. 
C) the level of supply chain integration the firm undertakes. 
D) the number of stages in the production process that are upstream from the stages the firm undertakes. 
A) its size in its primary market. 
B) its size in all markets in which is competes. 
C) the level of supply chain integration the firm undertakes. 
D) the number of stages in the production process that are upstream from the stages the firm undertakes.

Question 17

-The above figure shows the cost curves for a competitive firm. If the profit-maximizing level of output is 40, price is equal to

Accepted Answer

A) $0. 
B) $15. 
C) $10. 
D) $11. 
A) $0. 
B) $15. 
C) $10. 
D) $11.

Question 18

In a monopolistically competitive market

Accepted Answer

A) firms are price setters. 
B) barriers to entry are high. 
C) firms earn positive economic profit in the long run. 
D) products are undifferentiated. 
A) firms are price setters. 
B) barriers to entry are high. 
C) firms earn positive economic profit in the long run. 
D) products are undifferentiated.

Question 19

A firm sets its output where

Accepted Answer

A) marginal profit is zero. 
B) marginal revenue is maximized. 
C) marginal profit equals marginal revenue. 
D) marginal profit is maximized. 
A) marginal profit is zero. 
B) marginal revenue is maximized. 
C) marginal profit equals marginal revenue. 
D) marginal profit is maximized.

Question 20

If the present value of all future revenue is positive, then

Accepted Answer

A) the firm should remain operating, even if it earns negative profit in the short run. 
B) the firm should shut down if it is earning a negative profit in the short run. 
C) the firm should shut down if it cannot cover its fixed costs in the short run. 
D) Unable to determine with the information given. 
A) the firm should remain operating, even if it earns negative profit in the short run. 
B) the firm should shut down if it is earning a negative profit in the short run. 
C) the firm should shut down if it cannot cover its fixed costs in the short run. 
D) Unable to determine with the information given.

Disruptive innovations

The present value of a loan is the

Supply chain management refers to

A firm should always shut down if its revenue is

If the market price in a competitive market is below the minimum of average variable cost, the firm will shut down.

A firm's vertical dimension refers to

Firms might vertically disintegrate when

If a firm makes zero economic profit, then the firm

A firm that is vertically integrated

A ________ is a governance structure where owners are not personally liable.

If a firm doesn't make an economic profit, it will shut down.

Which entity produces the greatest proportion of U.S. gross domestic product?

-The above figure shows the cost curves for a competitive firm. The firm will incur economic losses if the price is less than

-The above figure shows the cost curves for a competitive firm. If the firm is to operate in the short run, price must exceed

Limited liability is a benefit available only to

A firm's horizontal dimension refers to

-The above figure shows the cost curves for a competitive firm. If the profit-maximizing level of output is 40, price is equal to

In a monopolistically competitive market

A firm sets its output where

If the present value of all future revenue is positive, then

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 7: Firm Organization and Market Structure

Disruptive innovations

The present value of a loan is the

Supply chain management refers to

A firm should always shut down if its revenue is

If the market price in a competitive market is below the minimum of average variable cost, the firm will shut down.

A firm's vertical dimension refers to

Firms might vertically disintegrate when

If a firm makes zero economic profit, then the firm

A firm that is vertically integrated

A ________ is a governance structure where owners are not personally liable.

If a firm doesn't make an economic profit, it will shut down.

Which entity produces the greatest proportion of U.S. gross domestic product?

-The above figure shows the cost curves for a competitive firm. The firm will incur economic losses if the price is less than

-The above figure shows the cost curves for a competitive firm. If the firm is to operate in the short run, price must exceed

Limited liability is a benefit available only to

A firm's horizontal dimension refers to

-The above figure shows the cost curves for a competitive firm. If the profit-maximizing level of output is 40, price is equal to

In a monopolistically competitive market

A firm sets its output where

If the present value of all future revenue is positive, then

Introduction

Supply and Demand

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters