GEN BUS 310 - Modules 1-4 PRACTICE EXAMS

C

. Ronald Coase sold 500 shares of Oshkosh stock on the New York Stock Exchange. This transaction _________________. A. took place in the primary market B. was a public offering C. took place in a secondary market D. involved a proxy E. was a private placement F. None of these choices correctly complete the sentence.

D

Capital budgeting is the process of ____________________. A. determining how to raise the money required to fund a project B. deciding how much cash to keep on hand C. deciding how much of earnings a firm should retain D. planning and managing the firm's long-term investments E. deciding what marketable securities to purchase F. None of these choices correctly complete the sentence.

D

A complement is a good that is ________________. A. of higher quality than another good B. of lower quality than another good C. of the same quality of another good D. used in conjunction with another good E. used instead of another good F. None of these choices correctly complete the sentence.

A

A corporation borrows money using _____________. A. its own name B. the name of one of its directors C. the name of its CEO D. the name of the chairman of the Board E. the name of a designated employee F. None of these choices correctly complete the sentence

D

A demand schedule shows the relationship between the quantity demanded of a commodity over a given period of time and __________________. A. the tastes of the consumers B. the price of related commodities C. the income of consumers D. the price of the commodity E. the quantity supplied of the commodity F. None of these choices correctly complete the sentence

B

A limited liability company pays tax like a corporation. A. true B. false

D and E

A stakeholder is _______________. A. a person who owns shares of stock B. any person who has voting rights based on stock ownership of a corporation C. a person who initially founded a firm and currently has management control over that firm D. a supplier to whom a firm currently owes money E. any party, other than a capital provider, which has a claim on the cash flows of a firm F. None of the above is the single best answer.

E = 200 I = 200 (future economic benefit) O = 300

Cardi B just received a $100 birthday gift from her father. Her financial advisor told her to invest this money in the USSE (Under the Sea Stock Exchange), which could increase her wealth by $200. However, she has also had her eye on a new $100 pearl necklace. If Cardi B decides to buy the necklace, what are her explicit, implicit, and opportunity costs?

40, 100, 50 (the price falls by 40%, quantity demanded increases by 100%, and quantity supplied falls by 50%)

If the price of Xbox's changed from $250 to $150, what is the percentage change in price? What is the percentage change in quantity demanded? What is the percentage change in quantity supplied?

C

If the price of a good falls, there is a _____________ the demand curve. A. rightward shift of B. leftward shift of C. movement down along D. movement up along E. change in the slope of F. None of these choices correctly complete the sentence

B

If the price of a substitute to good A increases, then __________________. A. the demand for good A will decrease B. the demand for good A will increase C. the demand for good A will not change D. the market price for good A will decrease E. the supply of good A will decrease F. None of these choices correctly complete the sentence.

C

If the price per bushel of corn increased from $5 to $6 because of a poor harvest, then __________. A. the demand for corn decreases B. the quantity supplied of corn increases C. the quantity demanded of corn decreases D. the supply of corn increases E. the demand for corn increases F. None of these choices correctly complete the sentence

E

If two firms were to trade with each other, where would the gains from trade be illustrated on the production possibilities frontier? Select one or more correct answers. A. At the y-axis intercept. B. At a point inside the PPF. C. At a point on the PPF. D. At the x-axis intercept. E. At a point outside the PPF. F. None of these answers are correct.

B

If you buy shares of stock in a corporation from your mother via the NYSE, you are ____________. A. violating the Sarbanes-Oxley Act of 2002 B. participating in the secondary market C. engaging in a proxy transaction D. creating an agency conflict E. issuing shares F. None of these choices correctly complete the sentence

A

Refer to the demand and supply curves D1 and S, if the current market price is $1.05 per pound, then __________________________. A. there is a shortage of 500,000 pounds of poultry B. there is a shortage of 300,000 pounds of poultry C. there is a shortage of 200,000 pounds of poultry D. there is a surplus of 500,000 pounds of poultry E. there is a surplus of 300,000 pounds of poultry F. None of these choices correctly complete the sentence.

B

Refer to the initial curves D and S, if the current market price is $40, then ____________________. A. there is a surplus of 80 watches B. there is a surplus of 40 watches C. there is a shortage of 80 watches D. there is a shortage of 40 watches E. there is a shortage of 20 watches F. None of these choices correctly complete the sentence.

C

Rolex Watch expects a recession to occur. Knowing that a Rolex is a normal good, you predict that the demand for a Rolex _______________________. A. will remain unchanged B. will increase C. will decrease D. might increase or decrease E. might increase, decrease, or remain unchanged F. None of these choices correctly complete the sentence.

B

Snoop Dogg wins a movie ticket in a contest on the radio. If Snoop Dogg decides to use the ticket and goes to the movie, what is the implicit cost that he incurs? Select one or more correct answers. A. The cost of popcorn and soda that he buys at the theater. B. The cost of other activities that he could have done instead of being at the movie. C. The cost of commuting to the movie theater and back. D. He does not incur any implicit costs because the ticket is free. E. The price of the ticket for the movie. F. None of these are an implicit cost Snoop Dogg incurs.

F

Sunk costs are generally the same as which of the following costs? Select one or more correct answers. A. implicit costs B. explicit costs C. accounting costs D. opportunity costs E. economic costs F. None of the above are correct

17000

Suppose the explicit cost of buying a new car is $15,000 and the implicit cost of buying a new car is $2,000. What then is the opportunity cost of buying a new car in dollars?

C

The Sarbanes-Oxley Act in 2002, was adopted primarily to _________________. A. eliminate costly accounting reports B. replace the need for accounting audits by external auditors C. protect investors from corporate abuse D. protect corporate directors from legal liability E. replace internal auditors with external auditors F. None of these choices correctly complete the sentence.

D

The amount that firms plan to produce during a given time period at a particular price is the _______. A. demand B. supply C. quantity demanded D. quantity supplied E. equilibrium price F. None of these choices correctly complete the sentence

E

The demand for a good is elastic if _______________. A. a decrease in its price results in a decrease in total expenditure B. the good is a necessity C. the good is a substitute D. an increase in its price results in an increase in total expenditure E. an increase in its price results in a decrease in total expenditure F. None of these choices correctly complete the sentence.

D

Which form of business structure do we most associate with agency problems? A. sole proprietorship B. general partnership C. limited partnership D. corporation E. limited liability company F. None of the above is the single best answer.

A. C, and D

Which of the following are cash flows from a corporation into the financial markets? A. repayment of long-term debt B. payment of government taxes C. payment of loan interest D. payment of a quarterly dividend E. issuing a bond in the primary market F. None of the above is the single best answer.

A and E

Which of the following are disadvantages of a corporation? A. double taxation B. ease of business formation C. limited equity D. unlimited life E. separation of owners and management F. None of the above is the single best answer

D

Which of the following are most apt to create an agency problem? A. Allowing the CEO to own shares of the company's stock. B. Providing free air travel for corporate executives to attend the annual shareholders' meeting. C. Granting stock bonuses to all employees within the firm. D. Paying the CEO a salary based on the growth rate of the firm's sales. E. Reimbursing employees for business-related expenses. F. None of the above is the single best answer

C

Which of the following are taxed at the personal level while providing limited liability for all of its owners? A. general partnership B. limited partnership C. S-corporation D. sole proprietorship E. C-corporation F. None of the above is the single best answer

C

Which of the following are true if Ludacris has an absolute advantage in the production of microphones over that of 50 Cent? Select one or more correct answers. A. Ludacris will specialize in the production of microphones. B. Ludacris can produce microphones at a lower opportunisty cost than 50 Cent. C. Ludacris can produce more microphones than 50 Cent. D. Ludacris can benefit by limiting the number of microphones he trades with 50 Cent. E. Ludacris will refuse to trade with 50 Cent. F. None of these statements are true.

B,C, E

Which of the following do economists assume about market participants? Select one or more correct answers. A. Market participants are not necessarily rational because they often display random patterns of behavior. B. Despite an unknown future, market participants weigh expected benefits against costs when they make decisions. C. Individuals must make choices no matter how wealthy because we all face scarcity of some kind. D. Giving to charity is irrational. E. Market participants pursue goals. F. None of these choices are an assumption economists make.

C and D

Which of the following is NOT a basic assumption economists consider in microeconomics? Select one or more correct answers. A. Market participants are goal-oriented. B. Market participants confront scarce resources. C. Time is free. D. Market participants will trade only when they have an absolute advantage. E. Market participants engage in rational behavior. F. None of the above are correct.

C (After the price increase, Total Expenditure = = = p q $240 800,000 $192,000,000 . Because total expenditure increases with a price increase, demand is inelastic)

Which of the following is true if the price of Air Jordan XX9's increased from $225 to $240? A. Demand is elastic. B. Supply is elastic. C. Demand is inelastic. D. Supply is inelastic. E. Demand is neither elastic nor inelastic. F. None of these choices is correct.

B (the price increases by 50%., whereas the percentage change in the quantity supplied is 100% from the previous problem. Because the percentage change in quantity is greater than the percentage change in price supply is elastic)

Which of the following is true if the price of tomatoes increased from $8 to $12 per bushel? A. Demand is elastic. B. Supply is elastic. C. Demand is inelastic. D. Supply is inelastic. E. Demand is neither elastic nor inelastic. F. None of these choices is correct.

E

Which of the following pairs of goods are most likely substitutes? A. lettuce and salad dressing B. DVD's and DVD players C. pancakes and syrup D. tuna fish and gasoline E. margarine and butter F. None of the above is the single best answer.

E

Which of the following refer to the mix of financing a firm uses? A. working capital B. debt C. investment capital D. net capital E. capital structure F. None of the above is the single best answer

E

Which of the following represent cash inflows into a corporation? A. payment for employee wages B. hiring a new employee C. a stock buy-back D. purchasing new equipment E. a sale to a customer F. None of the above is the single best answer

C and E

Which of the following represent cash outflows from a corporation? A. issuance of securities B. new loan proceeds C. payment of dividends D. issuance of bonds E. paying employee wages and benefits F. None of the above is the single best answer.

A and B

Which of the following statements about the principle of comparative advantage are true? Select one or more correct answers. A. Producers should specialize in the production of goods which have the lowest internal price. B. Producers should specialize in the production of goods for which they have a lower opportunity cost. C. Producers should specialize in the production of goods which they can produce with fewer resources. D. Producers should specialize in the production of goods they enjoy consuming. E. Producers should specialize in the production of goods that have a lower explicit cost to produce. F. None of these statements are true.

B

Which of the following statements are correct? A. All partners enjoy limited liability in a limited partnership. B. Profits of sole proprietorships are taxed similarly to those of partnerships. C. Both partnerships and corporations have unlimited lives. D. An owner of a sole proprietorship has limited liability. E. Owners of C-corporations have limited liability while those of S-corporations do not. F. None of the above is the single best answer.

A, B, and D

Which of the following statements are correct? Select one or more correct answers. A. Beyonce has an absolute advantage in producing kilts. B. Ice Cube has a comparative advantage in producing bagpipes. C. Ice Cube and Beyonce have the same opportunity costs so there can be no gains from trade. D. Beyonce has a comparative advantage in producing kilts. E. Ice Cube has an absolute advantage in producing bagpipes. F. None of these statements are correct.

A and E

Which of the following statements are false. Only select "All are true." if none of the other choices is false. A. As long as people have the same skill sets, there will be trading opportunities. B. Productivity increases as people specialize. C. People specialize in the good or service in which they have a comparative advantage. D. Trade allows for the possibility of a free lunch. E. A middleman buys from a trader at the ask and sells to another at the bid. F. All are true.

C

Which of the following statements are false? Only select "All are true." if none of the other choices are false. A. Specialization leads to increased productive output. B. Middlemen facilitate trade. C. Absolute advantage leads to specialization. D. Money solves the limitations of barter. E. The slope of a production possibility frontier characterizes opportunity costs. F. Scarcity necessitates trade-offs. G. All are true.

F

Which of the following statements are true? Select one or more correct answers. A. Jay Z should specialize in necklaces. B. Dr. Dre has a higher internal price for necklaces than does Jay Z . C. Dr. Dre should specialize in sneakers. D. Because he has an absolute advantage in sneakers and necklaces, Jay Z will not specialize and trade. E. Dr. Dre has the comparative advantage in producing sneakers. F. None of the above are correct.

A

Which of the following would NOT be a determinant of demand? I. the price of inputs used to produce the good III. the income of consumers II. the tastes of consumers IV. the price of related goods A. I only B. I and IV C. I, II, and III D. II, III, and IV E. IV only F. None of the above is the single best answer.

E

Which one of the following is a means by which shareholders can replace company management? A. stock options B. poison pill C. Sarbanes-Oxley Act D. agency play E. proxy fight F. None of the above is the single best answer

C

Which one of the following is an agency cost? A. increasing the quarterly dividend B. investing in a new project that creates firm value C. hiring outside accountants to audit the company's financial statements D. accepting an investment opportunity that will add value to the firm E. closing a division of the firm that is operating at a loss F. None of the above is the single best answer.

E

Which one of the following is the best description of the goal of a financial manager in a public corporation whose shares trade on exchanges such as the NYSE and NASDAQ? A. Maximize profits over the short-term. B. Maximize sales over the short-term. C. Avoid financial distress. D. Maintain steady earnings growth. E. Maximize the current value per share. F. None of the above is the single best answer

E

Which one of the following parties has ultimate control of a corporation? A. chairman of the board B. board of directors C. chief executive officer D. chief operating officer E. shareholders F. None of the above is the single best answer

C

Which one of the following represents a potential agency problem? A. adherence to the Sarbanes-Oxley Act in 2002 B. hiring a manager and compensating her with shares of company stock C. paying a management bonus based on the number of employees managed D. paying all company earnings out to shareholders in the form of dividends E. retaining all company earnings in the business F. None of the above is the single best answer.

A

Which one of the following statements concerning corporations is correct? A. The bylaws set forth the rules describing how a corporation regulates its existence. B. The articles of incorporation include the procedures to be followed for electing corporate directors. C. Corporate income is taxed only when it distributes dividends to shareholders. D. A corporation is the easiest form of business entity to create. E. The board of directors is entitled to all the residual profits. F. None of the above is the single best answer.

B and E

Wheat is the main input in the production of flour. If the price of wheat increases, all else equal, we would expect _______________________. A. the supply of flour to increase B. the supply of flour to decrease C. the supply of flour to be unaffected D. the demand for flour to increase E. the demand for flour to be unaffected F. None of these choices correctly complete the sentence.

1/4 corn

What is the internal price to Lil Wayne to produce one gallon of milk?

1 bappipe

What is the opportunity cost of producing one kilt for Beyonce?

3 bagpipes

What is the opportunity cost of producing one kilt for Ice Cube?

4 necklaces

What is the opportunity cost of producing one sneaker for Jay Z?

1/5 sneaker

What is the opportunity cost to Dr. Dre to produce one necklace?

4 milks

What is the opportunity cost to Lil Wayne to produce one bushel of corn?

E

What is the opportunity cost to Rihanna if she decides to produce 180 candles? Select the single best answer. A. 90 candles B. 30 candles C. 20 bowls D. 10 bowls E. 30 bowls F. None of the above is the single best answer.

D

What is the opportunity cost to Rihanna of increasing the production of candles from 60 to 120? Select one or more correct answers. A. 90 candles B. 30 candles C. 20 bowls D. 10 bowls E. There is no opportunity cost at this production level. F. None of these choices are the correct opportunity cost.

D. 100 baseballs

What is the opportunity cost to the economy of moving from point A to point B? Select one or more correct answers. A. 100 bananas B. 50 bananas C. 50 baseballs D. 100 baseballs E. 150 baseballs F. None of these answers are correct.

D

What is the percentage change in quantity supplied if the price of tomatoes increased from $8 to $12 per bushel? A. 25 percent B. 50 percent C. 75 percent D. 100 percent E. 125 percent F. None of the above is the single best answer.

800,000 pairs

What is the quantity demanded if the price of Air Jordan XX9's is $240?

$185,625,000 (Total Expenditure = p x q $225 x 825,000)

What is the total expenditure among consumers if the price of Air Jordan XX9's is currently $225?

D. 200 baseballs

What output could this economy achieve if it puts all of its available resources into the production of baseballs? Select one or more correct answers. A. 400 baseballs B. 100 baseballs and 300 bananas C. 150 baseballs and 200 bananas D. 200 baseballs E. 50 baseballs and 400 bananas F. None of these choices are correct

C

Determining the mix of debt and equity to be used to finance a firm is a ___________________. A. capital budgeting decision B. working capital management decision C. capital structure decision D. stakeholder decision E. agency decision F. None of these choices correctly complete the sentence.

C

2. A good whose demand increases as income increases is a _______________. A. substitute good B. complementary good C. normal good D. inferior good E. elastic good F. None of these choices correctly complete the sentence

A

20. Which of the following statements are false? Only select "All are true." if none of the other choices are false. A. Fiat money has intrinsic value. B. Money acts as a medium of exchange, a unit of account, and store of value. C. Barter suffers from a coincidence of wants problem and numerous pricing pairs. D. Commodity money acts as a medium of exchange and has intrinsic value. E. Desirable properties of money include portability, divisibility, uniformity, and fungibility. F. Money should be difficult to counterfeit and have a high value-to-weight ratio. G. All are true.

B, C, D, and E

Eminem is captaining a freighter crossing Lake Michigan. After departing Duluth, he realizes his ship is under-fueled. He must decide whether to call a tugboat service or instruct the crew to use their personal floatation devices, swim to shore, and use a colleague's ship to refuel their ship the next day. Which of the following are sunk costs incurred by Eminem? Select one or more correct answers. A. The cost of the tugboat service. B. The fuel he will purchase tomorrow to fill up the freighter. C. The insurance policy on the freighter. D. The cost of the personal flotation devices. E. The fuel he burned since departing Duluth. F. None of these are sunk costs.

A

Gene Fama is interested in purchasing Robert Shiller's factory. Since Gene is a poor negotiator, so he hires Lars Hansen to negotiate the purchase price. Identify the parties to this transaction. A. Gene is the principal and Lars is the agent. B. Robert is the principal and Lars is the agent. C. Robert is the principal and Gene is the agent. D. Lars is the principal and Gene is the agent. E. Lars is the principal and Robert is the agent. F. None of the above is the single best answer.

A and B (because the percentage change in quantity demanded and supplied change more than the percentage change in price.)

Given your results in the previous question, which of the following statements are true if the price of Xbox's change from $250 to $150? A. Demand is elastic. B. Supply is elastic. C. Demand is inelastic. D. Supply is inelastic. E. Demand is neither elastic nor inelastic. F. None of these choices is correct.

A

If Nicki Minaj were to enter this market as a middlewoman, what would be an acceptable range of prices for one sneaker for all the parties involved? Select the single best answer. A. between 4 and 5 necklaces B. between 1 and 4 necklaces C. between 1 and 5 necklaces D. between 1 and 16 necklaces E. between 1 and 10 necklaces F. None of the above is the single best answer.

. $1.10 per pound

If the current supply and demand curves are S and D1, what is the current equilibrium price?

B, C, and E

If the figure above represents Lil Wayne's maximum output for milk and corn, which of the following are true if Kanye West's maximum production is either 400 gallons of milk or 50 bushels of corn? Select one or more correct answers. A. Kanye has the absolute advantage in producing both milk and corn. B. Lil Wayne should specialize in corn production. C. Lil Wayne has an absolute advantage in corn. D. Kanye should specialize in milk production because he has an absolute advantage over Lil Wayne. E. Kayne has a higher internal price per bushel of corn than does Lil Wayne. F. None of these choices are correct.

60 watches

If the initial demand and supply curves are D and S, what is the initial equilibrium quantity?

E

If the price of Xbox's changed from $150 to $200, then ______________________. A. there will be a shortage of 5,000 units B. there will be a surplus of 5,000 units C. there will be a shortage of 15,000 units D. there will be a surplus of 15,000 E. the market will be in equilibrium F. None of these choices correctly complete the sentence.

There would be an inward shift of the demand curve for pizza because of the newly available substitute, fried chicken.

On any given Friday night in Madison, thousands of hungry college students are looking for something to eat. As students decide where they want to eat, there are a variety of factors that go into their decision making. Things like price and taste being two of them. One of their options is pizza. What would happen to the graph below if a new popular fried chicken chain opens on State Street?

A. on the frontier

On the production possibilities frontier, production is efficient if the production point is ___________. Select one or more correct answers. A. on the frontier B. on or inside the frontier C. outside the frontier D. inside the frontier E. on or outside the frontier F. None of these choices correctly completes the sentence

D

The goal of financial management is to maximize the current ______________________. A. net income of the firm B. dividends per share C. resources of the firm D. value of the existing stock E. working capital of the firm F. None of these choices correctly complete the sentence.

A

The law of supply states that, other things remaining the same, _________________. A. firms will produce more of a good the higher its price B. firms will produce more of a good the less it costs to produce it C. firms will produce less of a good as the required resources become scarcer D. firms will produce less of a good the more it costs to produce it E. firms will produce more of a good as competitors exit the marketplace F. None of these choices correctly complete the sentence.

C

The management of a firm's accounts receivables is referred to as ________________. A. capital structure management B. capital budgeting C. working capital management D. investment management E. corporate management F. None of these choices correctly complete the sentence.

A

The management of a firm's long-term debt and equity is referred to as ___________________. A. capital structure management B. capital budgeting C. working capital management D. investment management E. operations management F. None of these choices correctly complete the sentence.

B

The owner of a sole proprietorship ______________________. A. has unlimited legal liability only if she is actively involved in the daily operations of the business B. is personally liable for all of the company's debts C. has created an organization with an unlimited life D. suffers from double taxation E. can easily transfer ownership F. None of these choices correctly complete the sentence.

C

The price elasticity of demand measures _________________? A. the slope of a supply curve B. how often the price of a good changes C. how responsive the quantity demanded is to changes in price D. how sensitive the quantity demanded is to changes in demand E. how sensitive the quantity demanded is to changes in supply F. None of the above is the single best answer.

C

The price of a bottle of water rises from $1 to $2, resulting in the quantity demanded to fall from 700,000 to 500,000 bottles. Which of the following is true? I. The demand for bottled water is inelastic. II. The demand for bottled water is elastic. III. The supply of bottled water is elastic. IV. Consumers are relatively insensitive to price changes in bottled water. A. II only B. I and III C. I and IV D. II and IV E. I, III, and IV F. None of the above is the single best answer.

A, B, C, and D

Under what conditions can an individual's consumption possibilities frontier be outside of their existing production possibilities frontier? Select one or more correct answers. A. If there is a technological advance. B. If additional resources become available. C. If the individual specializes and engages in trade. D. If a middleman uses their information to facilitate trade. E. If the individual produces their maximum output. F. None of the above are correct.

C

Using the supply-demand model, _____________ could potentially explain a shift in equilibrium from point C to point A in the natural gas market. A. a decrease in consumer income B. a change in consumer preferences for more fuel-efficient cars C. a new tax on the production of natural gas D. a technological advancement in natural gas production E. a decrease in the price of a substitute F. None of the above is the single best answer.

E

Using the supply-demand model, _____________ could potentially explain a shift in equilibrium from point C to point D in the natural gas market? A. an increase in the price of oil B. a tax subsidy for the producers of natural gas C. a reduction in the price of inputs to produce natural gas D. an increase in household income E. an increase in the price of a complement F. None of the above is the single best answer

D

Using the supply-demand model, _____________ could potentially explain a shift in equilibrium from point C to point E in the natural gas market. A. an increase in consumer income B. a change in consumer preferences for more fuel-efficient cars C. an increase in the price of oil D. a technological advancement in natural gas production E. news that natural gas is good for the environment F. None of the above is the single best answer.

C

What does point C on the graph represent? Select one or more correct answers. A. An efficient economy. B. An inefficient economy. C. An unachievable level of output given the economy's resources and technology. D. An economy with limited resources. E. An economy that has fully deployed its resources. F. None of these choices are a correct description of point C

B and E

What does point D on the graph represent? Select one or more correct answers. A. An efficient economy. B. An inefficient economy. C. An economy with limited resources. D. An economy that is unable to trade with another economy. E. An economy that could produce more baseball, bananas, or both. F. None of the above are correct.

1 kilt

What is Beyonce's internal price of producing one bagpipe?

F (what is it?)

What is Rihanna's internal price for a candle? Select one or more correct answers A. 1 bowl B. 2 bowls C. 3 bowls D. 10 bowls E. 30 bowls F. None of the answers are Rihanna's internal price for a candle

C

Which one of the following statements concerning partnerships is correct? A. All partners enjoy limited liability if they create a general partnership of equal shares. B. A limited partner actively participates in running the partnership daily. C. A general partnership terminates whenever one general partner decides to sell her share of the business. D. A general partnership has an unlimited life while a limited partnership has a limited life. E. A limited partnership is limited to two partners F. None of the above is the single best answer

C

Why should financial managers strive to maximize the current value per share of the outstanding stock? A. Doing so guarantees the company will grow in size at the maximum possible rate. B. Doing so increases employee salaries. C. Because they have been hired to represent the interests of the current shareholders. D. Because this will increase the current dividends per share. E. Because managers often receive shares of stock as part of their compensation. F. None of the above is the single best answer.

B and C

__________________ could explain a shift in the demand curve for poultry from D to D1? A. An increase in the price of poultry B. A decrease in the price of beef C. An increase in the desirability of fish D. A decrease in the price of poultry feed E. A tax subsidy on the production of chickens F. None of these choices can explain the shift in demand.

B

___________________ could explain a shift of the supply curve from S to S1? A. A decrease in the price of watches B. An improvement in production technology C. An increase in income D. An increase in input prices E. A change in consumer preferences F. None of the above is the single best answer.