Chap 6 jeff perlof

Economists typically assume that the owners of firms wish to

• produce efficiently.

• maximize sales revenues.

• maximize profits.

• All of the above.

An organization that converts inputs (like Labor, Capital etc.) into output can be a

• firm.

• sole proprietorship.

• corporation.

• All of the above.

Efficient production occurs if a firm

• cannot produce its current level of output with fewer inputs.

• given the quantity of inputs, cannot produce more output.

• maximizes profit.

• All of the above.

Limited liability is a benefit to

• sole proprietorships.

• partnerships.

• corporations.

• All of the above.

What is one of the biggest differences between a sole proprietorship and a corporation?

• Sole proprietorships offer stock.

• Corporation shareholders elect the managers of the firm.

• Sole proprietorships have limited liability.

• Corporations are the only profitable firms.

Which entity produces the greatest proportion of U.S. gross national product?

• government

• non-profit organizations such as hospitals

• firms

• universities

Technological efficiency is

• a necessary and sufficient condition for profit maximization.

• a sufficient but not necessary condition for profit maximization.

• a necessary but not sufficient condition for profit maximization.

• a theoretical construct with little connection to the real world.

In China, firms owned by the government are known as

• state-owned enterprises (SOEs).

• government enterprises.

• corporations.

• government owned partnerships.

Since 1999, the number of small state-owned enterprises (SOEs) in China has

• decreased, but the large SOEs continue to hold a large proportion of industrialized assets.

• increased, but large SOEs has decreased.

• decreased along with the large SOEs.

• remained unchanged.

Firms maximize profit when

• the additional benefit from producing a good equals the additional cost of producing that good.

• MR = MC.

• the derivative of the profit function with respect to output is zero.

• All of the above.