Economics MCQs

Page No. 158

Behavioral theories of the firm concentrate on the _______ interests of _______?


acommon; different parts of the firm

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bcommon; mangers

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cconflicting; managers

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dconflicting; different parts of the firm

✓



Fear to take-overs will lead firms to maximize ?


agrowth

✖


b sales revenue

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cmanagers utility

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dprofits

✓


View Answer profits

The merger of a clothing firm and a software producer would be a _______ merger?


ahorizontal

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bvertical

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cconglomerate

✓


dhomogeneous

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View Answer conglomerate

Growth maximization is the same as ?


asales revenue maximization

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bmaximization the growth of sales revenue.

✓


cSales maximization

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dlong-run profit maximization.

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A sale maximizing firm will produce where ?


aAR minus AC is maximized

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bMC = MR

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cquantity sold is maximized

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d sales revenue is maximized

✓



The divorce of owner ship and control causes a problem usually referred to by economists as ?


a profit myopia

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bprincipal-agent problem.

✓


cmerger mania.

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dmoral hazard

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Williamson suggests that managers might NOT try to achieve ?


arespect of other managers.

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bmaximum profits.

✓


cjob security

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da large number of subordinates

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View Answer maximum profits.

A firm may be unable to maximize profits because it ?


adoes not know its MC and MR

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bhas too much information

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chas too little information

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dThe first and third option

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The divorce of ownership and control tends to occur in ?


a sole proprietors

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bpartnerships

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c public limited companies

✓


d monopolies

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Public limited companies may not maximize their profits because ?


a they are afraid of encouraging takeovers.

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bshareholders have little control over managers.

✓


c shareholders want higher dividends.

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d both the first and third option.

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