econ ch 10 study guide

Profit Maximization
a. is not the only goal a business can pursue
b. cannot be achieved by a business concerned with protecting its workers and the environment.
c. is likely to not be an objective of executives who do not own stock in the corporation they manage.
d. all of the above.

In economics, it is generally assumed that the basic goal of a firm is to:
a. maximize sales revenue
b. drive its rivals out of business
c. maximize protis or minimize loss.
d. maximize the recognition of the company among its buyers.

A holding company is a corporation:
a. that has been acquired in an unfriendly takeover.
b. whose purpose is to own stock in other corporations.
c. whose charter is under review by a state government.
d. owned by another corporation for the purpose of issuing bonds.

A communications company acquiring a clothing manufacturer is an example of:
a. vertical integration
b. horizontal integration
c. conglomerate integration
d. none of the above

The majority of business receipts in the United States goes to
a. trusts
b. corporations
c. partnerships
d. sole proprietorships

The majority of business firms in the United States are organized as:
a. trusts
b. corporations
c. partnerships
d. sole proprietorships

Which of the following is not an owner of a company
a. a bondholder
b. a sole proprietor
c. a general partner
d. a preferred stockholder.

The ownership share in a corporation that does not return a specified dividend to its holder is
a. a bond.
b. common stock
c. preferred stock
d. a letter of credit

Who of the following is not personally responsible for all debts of a business:
a. A sole proprietor.
b. A stockholder in a corporation.
c. A general partner in a partnership.
d. None of the above is personally responsible for all the debts of the business.

Which of the following statements is false:
a. It is not necessary to obtain a charter to form a partnership.
b. Total partnership receipts are less than total corporate receipts.
c. A partnership is a business organization owned by two or more persons.
d. It is possible to form a partnership where none of the partners have unlimited liability for the debts of the business.

To maximize satisfaction from earning income, you should:
a. always choose the higher paying of two jobs.
b. work as many hours as possible in order to purchase more want satisfying goods and services.
c. balance the additional satisfaction from the income against what is given up to earn that income.
d. determine which goods and services you want, and then owrk only as much as is needed to afford those products.

Suppose Good X costs twice as much as Good Y. To maximize satisfaction, you should buy Good X only if it adds at least:
a. half as much satisfaction as is added by Good Y.
b. as much satisfaction as is added by Good Y.
c. twice as much satisfaction as is added by Good Y.
d. none of the above.

If you receive the same amount of satisfaction from a grocery store's house brand soda you do from a populart name brand soda that costs twice as much, to maximize satisfaction you should drink:
a. the house brand soda.
b. equal amounts of each.
c. one half as much as you normally do, but drink the name brand soda.
d. neither one, since you cannot arrive at a perfect relationship between them.

To maximize satisfaction from consuming goods and services, a person should purchase the:
a. trendiest goods available.
b. least expensive goods available.
c. goods they have wanted for the longest itme.
d. goods that add teh most utility per dollar spent.

Individuals in households maximize their economic well-being by:
a. working as few hours as possible.
b. buying the lowest priced items they can find.
c. acquiring as many goods and services as possible.
d. none of the above.

A good with a useful lifetime of more than one year is a:
a. normal good.
b. durable good.
c. consumer good.
d. nondurable good.

You would expect the highest average money income to go to households headed by a:
a. married couple.
b. person 65 years of age or older.
c. person with a bachelor's degree.
d. person between 25 and 34 years of age.

From 1980 through 2008:
a. transfer payments increased as a percentage of total income.
b. proprietor's income increased as a percentage of total income.
c. labor income remained the largest component of total income.
d. all of the above.

The majority of earned income in the US is
a. wages
b. profits
c. interest
d. transfer payments

Over recent years in the US the number of households:
a. and the average number of persons per household has been incresing.
b. and the average number of persons per household has been decreasing.
c. has been increasing and the average number of persons per household has been decreasing.
d. has been decreasing and the average number of persons per household has been increasing.