Selling of stocks in the secondary market (stocks bought/sold between investors in exchanges like the New York Stock Exchange).

Using the principal-agent method.

Labor union agreements.

Reinvestment of profits.

All of the above can be used to finance a corporation.

Question 2

Economic profit can be calculated as ________

Question 2 options:

total revenue - explicit costs.

total revenue - implicit costs.

total revenue - explicit costs - implicit costs.

total revenue - fixed costs.

Question 3

The main advantage of a corporate form of organization is that _______

Question 3 options:

shareholders have limited liability.

shareholders have unlimited liability.

shareholders are not subject to double taxation.

all corporate profits must be distributed as dividends.

Question 4

Explicit costs are ________

Question 4 options:

the opportunity costs of all resources that are used by a firm.

the costs that are associated with the resources that a firm owns.

actual expenditures that a firm must make.

all costs that are associated with the short run.

Question 5

Jacob's business earns $10,000 in revenues, has explicit costs of $7,000, and has implicit costs of $5,000.Thus, forJacob, his business has anaccounting profit of ______

Question 5 options:

$2,000.

-$2,000.

$5,000.

$3,000.

Question 6

The theory that there are no predictable trends in securities prices is the ________

Question 6 options:

opportunity cost of capital.

random walk theory.

capital reinvestment.

present value.

Question 7

The principle that, "as more of a good is consumed, its extra benefit declines" is called: _______

Question 7 options:

the law of demand.

the law of diminishing marginal product.

the law of diminishing marginal utility.

the law of comparative advantage.

Question 8

Hunter owns a firm that produces light bulbs.As his firm's output increases, his firm's short-run marginal cost will eventually increase because of _____________________.

Question 8 options:

diseconomies of scale

a lower product price

inefficient production

the firm's need to break even

diminishing marginal product

Question 9

Which of the following isalways trueof the relationship between average and marginal costs?

Question 9 options:

Average total costs are increasing when marginal costs are increasing.

Marginal costs are increasing when average variable costs are higher than marginal costs.

Average variable costs are increasing when marginal costs are increasing.

Average variable costs are increasing when marginal costs are higher than average variable costs.

Average total costs are constant when marginal costs are constant.

Question 10

When Brandon's Cutting Service goes from three workers and three lawn mowers, to six workers and six lawn mowers, the number of lawns that can be mowed increases from 50 to 80.Brandon's Cutting Service has _________.

Question 10 options:

constant returns to scale

efficiencies of scale

diseconomies of scale

economies of scale

None of the above