Question 1

What is a disadvantage of a corporation relative to a sole proprietorship or partnership?

Accepted Answer

A) Owners have unlimited liability. 
B) Profits are taxed twice: as corporate profits and as dividend income and capital gains to stockholders. 
C) high cost of capital 
D) perpetual life 
E) dies with the owner 
A) Owners have unlimited liability. 
B) Profits are taxed twice: as corporate profits and as dividend income and capital gains to stockholders. 
C) high cost of capital 
D) perpetual life 
E) dies with the owner

Question 2

Use the table below to answer the following questions.
Table 10.2.2
Three methods of making one medical hologram
  
-In Table 10.2.2, which method of making a medical hologram is technologically efficient?

Accepted Answer

A) 1 only 
B) 2 only 
C) 3 only 
D) all of the above 
E) 1 and 3 only 
A) 1 only 
B) 2 only 
C) 3 only 
D) all of the above 
E) 1 and 3 only

Question 3

Which one of the following statements is true?

Accepted Answer

A) Firms are markets in and of themselves. 
B) Firms do not organize factors of production to produce goods and services. 
C) Firms are buyers of consumer goods and services. 
D) Efficient firms can eliminate scarcity. 
E) Firms are often more efficient than markets as coordinators of economic activity. 
A) Firms are markets in and of themselves. 
B) Firms do not organize factors of production to produce goods and services. 
C) Firms are buyers of consumer goods and services. 
D) Efficient firms can eliminate scarcity. 
E) Firms are often more efficient than markets as coordinators of economic activity.

Question 4

In the relationship between the owner of a bakery and the baker, the owner is

Accepted Answer

A) an agent, as is the baker. 
B) an agent and the baker is a principal. 
C) a principal and the baker is an agent. 
D) a principal, as is the baker. 
E) neither a principal nor an agent, but the baker is an agent. 
A) an agent, as is the baker. 
B) an agent and the baker is a principal. 
C) a principal and the baker is an agent. 
D) a principal, as is the baker. 
E) neither a principal nor an agent, but the baker is an agent.

Question 5

To produce a unit of output, Alphaworks uses 10 hours of labour and 5 kilograms of material.Betaworks uses 5 hours of labour and 10 kilograms of material, and Gammaworks uses 10 hours of labour and 10 kilograms of material.If labour costs $10 per hour and material costs $5 per kilogram, which firm is economically efficient?

Accepted Answer

A) Alphaworks only 
B) Betaworks only 
C) Gammaworks only 
D) Alphaworks and Betaworks 
E) Alphaworks and Gammaworks 
A) Alphaworks only 
B) Betaworks only 
C) Gammaworks only 
D) Alphaworks and Betaworks 
E) Alphaworks and Gammaworks

Question 6

Use the information below to answer the following question.
Fact 10.5.1
Two leading design firms, Astro Studios of San Francisco and Hers Experimental Design Laboratory, Inc. of Osaka, Japan, worked with Microsoft to design the Xbox 360 video game console. IBM, ATI, and SiS designed the Xbox 360's hardware. Three firms, Flextronics, Wistron, and Celestica, manufacture the Xbox 360 at their plants in China and Taiwan.
-Refer to Fact 10.5.1.Microsoft works with a large number of other firms to bring the Xbox to market, rather than performing all the required tasks at its headquarters in Seattle because

Accepted Answer

A) Microsoft wants to control as many firms as possible and by sending Xbox design and production to other firms, Microsoft gains control in a new market. 
B) this is the method of production with the lowest cost. 
C) Microsoft employees do not have the expertise to perform the necessary tasks. 
D) Microsoft already dominates too many markets and the government requires that other firms coordinate Xbox design and production. 
E) All of the above 
A) Microsoft wants to control as many firms as possible and by sending Xbox design and production to other firms, Microsoft gains control in a new market. 
B) this is the method of production with the lowest cost. 
C) Microsoft employees do not have the expertise to perform the necessary tasks. 
D) Microsoft already dominates too many markets and the government requires that other firms coordinate Xbox design and production. 
E) All of the above

Question 7

Where the Herfindahl-Hirschman Index is less than 1,000, the market is regarded as

Accepted Answer

A) a monopoly. 
B) an oligopoly. 
C) competitive. 
D) regulated. 
E) none of the above 
A) a monopoly. 
B) an oligopoly. 
C) competitive. 
D) regulated. 
E) none of the above

Question 8

Use the table below to answer the following questions.
Table 10.2.1
  
-Refer to Table 10.2.1.If the price of labour is $10 per unit and the price of capital is $20 per unit, which method is economically efficient?

Accepted Answer

A) 1 only 
B) 2 only 
C) 3 only 
D) all of the above 
E) 1 and 3 only 
A) 1 only 
B) 2 only 
C) 3 only 
D) all of the above 
E) 1 and 3 only

Question 9

Which of the following activities is most likely to be coordinated by a firm, instead of a market?

Accepted Answer

A) a large rock concert in Vancouver 
B) producing paperclips 
C) running a golf course 
D) selling groceries 
E) all of the above except A 
A) a large rock concert in Vancouver 
B) producing paperclips 
C) running a golf course 
D) selling groceries 
E) all of the above except A

Question 10

A firm's goal is to

Accepted Answer

A) maximize revenue. 
B) maximize cost while minimizing revenue. 
C) maximize profit. 
D) minimize costs. 
E) minimize risk. 
A) maximize revenue. 
B) maximize cost while minimizing revenue. 
C) maximize profit. 
D) minimize costs. 
E) minimize risk.

Question 11

Product differentiation is always a feature in

Accepted Answer

A) perfect competition. 
B) monopolistic competition. 
C) oligopoly. 
D) monopoly. 
E) all of the above 
A) perfect competition. 
B) monopolistic competition. 
C) oligopoly. 
D) monopoly. 
E) all of the above

Question 12

Which one of the following statements about the implicit rental rate of capital is true?

Accepted Answer

A) It is the market value of capital. 
B) It is the opportunity cost to a firm of using its own capital. 
C) It includes normal profit. 
D) It is the amount paid for the use of land or buildings. 
E) It is the depreciated value of capital. 
A) It is the market value of capital. 
B) It is the opportunity cost to a firm of using its own capital. 
C) It includes normal profit. 
D) It is the amount paid for the use of land or buildings. 
E) It is the depreciated value of capital.

Question 13

Firms coordinate economic activity more efficiently than markets when firms have

Accepted Answer

A) lower transactions costs. 
B) economies of scale. 
C) economies of scope. 
D) economies of team production. 
E) all of the above 
A) lower transactions costs. 
B) economies of scale. 
C) economies of scope. 
D) economies of team production. 
E) all of the above

Question 14

Firms cope with uncertainty and incomplete information by using

Accepted Answer

A) sole proprietorship, limited liability, and market coordination. 
B) ownership, incentive pay, and long-term contracts. 
C) team production, economies of scale, and transactions costs. 
D) the market, the firm, and internal organization. 
E) team production, economies of scale, and transaction costs. 
A) sole proprietorship, limited liability, and market coordination. 
B) ownership, incentive pay, and long-term contracts. 
C) team production, economies of scale, and transactions costs. 
D) the market, the firm, and internal organization. 
E) team production, economies of scale, and transaction costs.

Question 15

Which one of the following is an advantage of a corporation relative to a proprietorship or partnership?

Accepted Answer

A) Owners have limited liability. 
B) Profits are taxed once. 
C) difficult to raise money 
D) no principal-agent problems 
E) simple management structure 
A) Owners have limited liability. 
B) Profits are taxed once. 
C) difficult to raise money 
D) no principal-agent problems 
E) simple management structure

Question 16

Economic depreciation is

Accepted Answer

A) the same as depreciation calculated by an accountant. 
B) equal to economic profit minus normal profit. 
C) the change in the market value of capital over a given period. 
D) the deterioration of the physical appearance of a capital. 
E) paid in cash. 
A) the same as depreciation calculated by an accountant. 
B) equal to economic profit minus normal profit. 
C) the change in the market value of capital over a given period. 
D) the deterioration of the physical appearance of a capital. 
E) paid in cash.

Question 17

Firms organize production by using

Accepted Answer

A) command systems only. 
B) incentive systems only. 
C) command and incentive systems. 
D) market systems only. 
E) principal-agent systems only. 
A) command systems only. 
B) incentive systems only. 
C) command and incentive systems. 
D) market systems only. 
E) principal-agent systems only.

Question 18

Which one of the following would not likely be a firm with economies of scale?

Accepted Answer

A) an electrical production plant 
B) a steel mill 
C) a telephone company 
D) a firm that produces handmade cabinetry 
E) a multi-store dry-cleaning firm 
A) an electrical production plant 
B) a steel mill 
C) a telephone company 
D) a firm that produces handmade cabinetry 
E) a multi-store dry-cleaning firm

Question 19

Which one of the following is not generally a transactions cost?

Accepted Answer

A) the fee to a broker for buying stocks 
B) the cost of a lawyer who drafts a contract 
C) the cost of hiring someone to find you a supplier of raw materials 
D) the cost of the owner's time in a sole proprietorship 
E) the cost of phone calls made to find a buyer 
A) the fee to a broker for buying stocks 
B) the cost of a lawyer who drafts a contract 
C) the cost of hiring someone to find you a supplier of raw materials 
D) the cost of the owner's time in a sole proprietorship 
E) the cost of phone calls made to find a buyer

Question 20

A market in which the Herfindahl-Hirschman Index (HHI)lies between 1,000 and 1,800 is regarded as being

Accepted Answer

A) a monopoly. 
B) an oligopoly. 
C) a perfectly competitive market. 
D) a moderately competitive market. 
E) a potential matter of concern for regulators. 
A) a monopoly. 
B) an oligopoly. 
C) a perfectly competitive market. 
D) a moderately competitive market. 
E) a potential matter of concern for regulators.

What is a disadvantage of a corporation relative to a sole proprietorship or partnership?

Use the table below to answer the following questions. Table 10.2.2 Three methods of making one medical hologram -In Table 10.2.2, which method of making a medical hologram is technologically efficient?

Which one of the following statements is true?

In the relationship between the owner of a bakery and the baker, the owner is

Where the Herfindahl-Hirschman Index is less than 1,000, the market is regarded as

Use the table below to answer the following questions. Table 10.2.1 -Refer to Table 10.2.1.If the price of labour is $10 per unit and the price of capital is $20 per unit, which method is economically efficient?

Which of the following activities is most likely to be coordinated by a firm, instead of a market?

A firm's goal is to

Product differentiation is always a feature in

Which one of the following statements about the implicit rental rate of capital is true?

Firms coordinate economic activity more efficiently than markets when firms have

Firms cope with uncertainty and incomplete information by using

Which one of the following is an advantage of a corporation relative to a proprietorship or partnership?

Economic depreciation is

Firms organize production by using

Which one of the following would not likely be a firm with economies of scale?

Which one of the following is not generally a transactions cost?

A market in which the Herfindahl-Hirschman Index (HHI)lies between 1,000 and 1,800 is regarded as being

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

Exam 10: Organizing Production

What is a disadvantage of a corporation relative to a sole proprietorship or partnership?

Use the table below to answer the following questions. Table 10.2.2 Three methods of making one medical hologram -In Table 10.2.2, which method of making a medical hologram is technologically efficient?

Which one of the following statements is true?

In the relationship between the owner of a bakery and the baker, the owner is

Where the Herfindahl-Hirschman Index is less than 1,000, the market is regarded as

Use the table below to answer the following questions. Table 10.2.1 -Refer to Table 10.2.1.If the price of labour is $10 per unit and the price of capital is $20 per unit, which method is economically efficient?

Which of the following activities is most likely to be coordinated by a firm, instead of a market?

A firm's goal is to

Product differentiation is always a feature in

Which one of the following statements about the implicit rental rate of capital is true?

Firms coordinate economic activity more efficiently than markets when firms have

Firms cope with uncertainty and incomplete information by using

Which one of the following is an advantage of a corporation relative to a proprietorship or partnership?

Economic depreciation is

Firms organize production by using

Which one of the following would not likely be a firm with economies of scale?

Which one of the following is not generally a transactions cost?

A market in which the Herfindahl-Hirschman Index (HHI)lies between 1,000 and 1,800 is regarded as being

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters