Question 1

Partnerships whose members have _____ can face difficult problems operating and reaching decisions.

Accepted Answer

A) diverse functions 
B) specialized functions 
C) multiple functions 
D) limited functions 
A) diverse functions 
B) specialized functions 
C) multiple functions 
D) limited functions B

Question 2

What kind of problem do creditors lending funds to a sole proprietorship form of business face?

Accepted Answer

Uncertainty and lack of control are two major problems creditors experience.Each creditor faces a liquidity problem.Without special arrangements it will not be able to call in its loan or sell it to someone else if it wants to use the funds elsewhere or thinks the proprietor is misspending them.Besides a sole proprietorship business is inseparable from the proprietor.Death or retirement of a proprietor can cause its management to pass to people who are less competent or who have priorities or conflicts that lower its value.

Question 3

Which of the following is true about a hierarchy?

Accepted Answer

A) It primarily acts as a residual claimant. 
B) It is a group of individuals who make decisions. 
C) It is an alternative to independent specialization of individual workers. 
D) It is a group of individuals who hold shares of the company and are entitled to dividends. 
A) It primarily acts as a residual claimant. 
B) It is a group of individuals who make decisions. 
C) It is an alternative to independent specialization of individual workers. 
D) It is a group of individuals who hold shares of the company and are entitled to dividends. C

Question 4

Which of the following risks cannot be hedged by an insurance?

Accepted Answer

A) Exports damaged during shipment 
B) Theft during movement of goods 
C) An electrical fire at a warehouse 
D) Decreased sales resulting from poor salesmanship 
A) Exports damaged during shipment 
B) Theft during movement of goods 
C) An electrical fire at a warehouse 
D) Decreased sales resulting from poor salesmanship

Question 5

A residual claimant with supervisory powers resolves the difficulties independent workers have in arriving at choices that affect the entire group.

Accepted Answer

A) True 
 B)False

Question 6

_____ is a property which distinguishes corporations from proprietorships and partnerships.

Accepted Answer

A) Unlimited liability 
B) Division of labor 
C) Separation of ownership and management 
D) Centralized management and control 
A) Unlimited liability 
B) Division of labor 
C) Separation of ownership and management 
D) Centralized management and control

Question 7

Which of the following "shareholder rights" plan when implemented provides all shareholders other than outsiders the right to purchase additional shares at a discount?

Accepted Answer

A) A flip-in poison pill 
B) A "crown jewels" defense 
C) A "white knight" bid 
D) A de-conglomeration 
A) A flip-in poison pill 
B) A "crown jewels" defense 
C) A "white knight" bid 
D) A de-conglomeration

Question 8

Directors can make opportunistic choices to advance their personal interest when:

Accepted Answer

A) they plan to sell off the corporation stocks at inflated prices. 
B) they hold majority of the stocks in the corporation. 
C) they are aware that the cost of forming a new board of directors is high. 
D) their personal returns from the well being of the corporation is high. 
A) they plan to sell off the corporation stocks at inflated prices. 
B) they hold majority of the stocks in the corporation. 
C) they are aware that the cost of forming a new board of directors is high. 
D) their personal returns from the well being of the corporation is high.

Question 9

A sole proprietorship is characterized by:

Accepted Answer

A) separation of ownership and management. 
B) mutual agency. 
C) existence of multiple contracts. 
D) unlimited liability. 
A) separation of ownership and management. 
B) mutual agency. 
C) existence of multiple contracts. 
D) unlimited liability.

Question 10

A sole proprietor has limited liability and cannot be forced to pay its creditors from his/her personal resources.

Accepted Answer

A) True 
 B)False

Question 11

A _____ requires workers to comply with orders from a boss, who need not consult them when making decisions, and to be paid for their cooperation.

Accepted Answer

A) residual claimant 
B) hierarchy 
C) shareholder 
D) cooperative 
A) residual claimant 
B) hierarchy 
C) shareholder 
D) cooperative

Question 12

How does a residual claimant help to resolve the problems faced by independent specialized workers?

Accepted Answer

A residual claimant with supervisory pow

Question 13

Any form of wealth held by a sole proprietor will be factored into the terms of the loans she receives because:

Accepted Answer

A) her liability is limited. 
B) her business is inseparable from her. 
C) her business is too small to bear investment risks. 
D) her investment decisions depend on her total output. 
A) her liability is limited. 
B) her business is inseparable from her. 
C) her business is too small to bear investment risks. 
D) her investment decisions depend on her total output.

Question 14

State one implication of the principle of division of labor.

Accepted Answer

The principle of the division of labor e

Question 15

Mention some areas where partnerships are common.Give reason for your answer.

Accepted Answer

The areas where partnerships are common

Question 16

Explain the principal/agent problem encountered by corporations.

Accepted Answer

Shareholders are principals and director

Question 17

In a perfectly competitive market, traders bear the risk of opportunism because they are not in a position to choose from numerous potential counterparties while making a deal.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following can be considered an income risk?

Accepted Answer

A) Recession causing loss of pay to employees working in a particular industry 
B) Fall in employee turnover affecting company profits 
C) Economic growth resulting in demand-pull inflation 
D) Stock market boom encouraging investment in risky assets 
A) Recession causing loss of pay to employees working in a particular industry 
B) Fall in employee turnover affecting company profits 
C) Economic growth resulting in demand-pull inflation 
D) Stock market boom encouraging investment in risky assets

Question 19

How does supervision benefit team production?

Accepted Answer

In team production, all members must com

Question 20

A _____ puts the assets of two corporations under a common management.

Accepted Answer

A) acquisition 
B) vertical integration 
C) merger 
D) proxy fight 
A) acquisition 
B) vertical integration 
C) merger 
D) proxy fight

Partnerships whose members have _____ can face difficult problems operating and reaching decisions.

What kind of problem do creditors lending funds to a sole proprietorship form of business face?

Which of the following is true about a hierarchy?

Which of the following risks cannot be hedged by an insurance?

A residual claimant with supervisory powers resolves the difficulties independent workers have in arriving at choices that affect the entire group.

_____ is a property which distinguishes corporations from proprietorships and partnerships.

Which of the following "shareholder rights" plan when implemented provides all shareholders other than outsiders the right to purchase additional shares at a discount?

Directors can make opportunistic choices to advance their personal interest when:

A sole proprietorship is characterized by:

A sole proprietor has limited liability and cannot be forced to pay its creditors from his/her personal resources.

A _____ requires workers to comply with orders from a boss, who need not consult them when making decisions, and to be paid for their cooperation.

How does a residual claimant help to resolve the problems faced by independent specialized workers?

Any form of wealth held by a sole proprietor will be factored into the terms of the loans she receives because:

State one implication of the principle of division of labor.

Mention some areas where partnerships are common.Give reason for your answer.

Explain the principal/agent problem encountered by corporations.

In a perfectly competitive market, traders bear the risk of opportunism because they are not in a position to choose from numerous potential counterparties while making a deal.

Which of the following can be considered an income risk?

How does supervision benefit team production?

A _____ puts the assets of two corporations under a common management.

Reasoning With Economics: Models and Information

Transactions and Institutions: the Building Blocks

Markets

Cost and Production

Extreme Markets I: Perfect Competition

Extreme Markets II: Monopoly

Between the Extremes: Interaction and Strategy

Competition and Strategy

Beyond Markets; Property and Contracts

The Economics of Contracts

Risk and Information in Contracts

Organizational Design

Vertical Relationships

Employment Relationships

Time, Risk and Options

Conflict, Negotiation and Group Choice

Filters

Exam 12: Organizations in Concept and Practice

Partnerships whose members have _____ can face difficult problems operating and reaching decisions.

What kind of problem do creditors lending funds to a sole proprietorship form of business face?

Which of the following is true about a hierarchy?

Which of the following risks cannot be hedged by an insurance?

A residual claimant with supervisory powers resolves the difficulties independent workers have in arriving at choices that affect the entire group.

_____ is a property which distinguishes corporations from proprietorships and partnerships.

Which of the following "shareholder rights" plan when implemented provides all shareholders other than outsiders the right to purchase additional shares at a discount?

Directors can make opportunistic choices to advance their personal interest when:

A sole proprietorship is characterized by:

A sole proprietor has limited liability and cannot be forced to pay its creditors from his/her personal resources.

A _____ requires workers to comply with orders from a boss, who need not consult them when making decisions, and to be paid for their cooperation.

How does a residual claimant help to resolve the problems faced by independent specialized workers?

Any form of wealth held by a sole proprietor will be factored into the terms of the loans she receives because:

State one implication of the principle of division of labor.

Mention some areas where partnerships are common.Give reason for your answer.

Explain the principal/agent problem encountered by corporations.

In a perfectly competitive market, traders bear the risk of opportunism because they are not in a position to choose from numerous potential counterparties while making a deal.

Which of the following can be considered an income risk?

How does supervision benefit team production?

A _____ puts the assets of two corporations under a common management.

Reasoning With Economics: Models and Information

Transactions and Institutions: the Building Blocks

Markets

Cost and Production

Extreme Markets I: Perfect Competition

Extreme Markets II: Monopoly

Between the Extremes: Interaction and Strategy

Competition and Strategy

Beyond Markets; Property and Contracts

The Economics of Contracts

Risk and Information in Contracts

Organizational Design

Vertical Relationships

Employment Relationships

Time, Risk and Options

Conflict, Negotiation and Group Choice

Filters