04 Jun Test Quiz 1 • Question 1 1 out of 1 points
Question
Test Quiz 1
• Question 1
1 out of 1 points
Owners of a firm want the managers to make business decisions that will
Answers: maximize the value of the firm.
maximize expected profit in each period of operation.
maximize the market share of the firm.
both a and b are correct when revenue and cost conditions in one time period are independent of revenues and costs in future time periods.
• Question 2
1 out of 1 points
Managers’ pursuit of which of the following objectives would NOT lead to a principal-agent problem in a corporation?
Answers: The corporation’s growth
Increased market share for the corporation
The maximum possible profit for the corporation
A great “golden parachute” or retirement package
• Question 3
1 out of 1 points
The principal-agent problem of ownership vs. control of the corporation arises when owners and managers
Answers: pursue objectives that differ from those their customers wish them to pursue.
pursue objectives that differ from those their workers wish them to pursue.
pursue objectives that differ from those the government wishes them to pursue.
pursue different objectives.
• Question 4
1 out of 1 points
Moral hazard is the
Answers: outcome of a Prisoner’s Dilemma.
result of market signaling.
risk associated with a Dutch auction.
risk that one party to a contract may alter its post-contract behavior to the detriment of another party.
• Question 5
1 out of 1 points
The amount of money a firm pays to lease a building it uses for office space is called:
Answers: the full opportunity cost of production.
an explicit cost.
a real cost of production.
an implicit cost.
• Question 6
1 out of 1 points
Which of the following is an example of an “implicit cost”?
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