Chapter 7 test
Total cost divided by quantity produced equals the
Average total cost
A business organization that can conduct business in its own name and can own property as if it were an individual is a
Corporation
At a fast food restaurant we might observe the law of diminishing marginal returns because
Crowded kitchen space reduces the productivity of new employees
Shirking could be described as
Doing less than equal share of tasks
The advantages of a sole proprietorship include
Ease of freedom, total control of decisions
Which of the business organizations combines two or more peoples specialization with equal decision making authority
Partnership
Which of the following business organizations combines two or more peoples specializations with equal decision making authority
Partnership
To purchase a franchise, the person or group buying it must
Pay an initial fee Pay a royalty or percentage of he profits for a number of years Agree to meet certainly
Shirking occurs because
People value leisure
Bond holders are different from stock holders because they
Receive predetermined interest
Which of the following is a variable cost Cost Raw materials Business tax Property tax Rent
Rent
The disadvantages of partnerships include
Shared decisions making, limited life, unlimited liability
A person or group that buys a franchise is called a
Franchisee
Corporations are able to borrow large sums of money by
Issuing bonds
The owners of a corporation are
It's stockholders
A firm will increase production when
Marginal cost is less than marginal revenue
Economists believe that the major goal of each form is to
Maximize profit
Profit or loss is computed by
Subtracting total cost from total revenue
Marginal revenue equals
The change in total revenue divided by the change in the quantity of output sold
When deciding whether or not to increase production a business owner should carefully consider
The marginal cost of additional units
The cost to a firm that changes according to the number of units produced is the
Variable cost
