Economics MCQs

Page No. 158

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


acommon; different parts of the firm


bcommon; mangers


cconflicting; managers


dconflicting; different parts of the firm



Fear to take-overs will lead firms to maximize ?


agrowth


b sales revenue


cmanagers utility


dprofits


View Answer profits

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


ahorizontal


bvertical


cconglomerate


dhomogeneous


View Answer conglomerate

Growth maximization is the same as ?


asales revenue maximization


bmaximization the growth of sales revenue.


cSales maximization


dlong-run profit maximization.



A sale maximizing firm will produce where ?


aAR minus AC is maximized


bMC = MR


cquantity sold is maximized


d sales revenue is maximized



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


a profit myopia


bprincipal-agent problem.


cmerger mania.


dmoral hazard



Williamson suggests that managers might NOT try to achieve ?


arespect of other managers.


bmaximum profits.


cjob security


da large number of subordinates


View Answer maximum profits.

A firm may be unable to maximize profits because it ?


adoes not know its MC and MR


bhas too much information


chas too little information


dThe first and third option



The divorce of ownership and control tends to occur in ?


a sole proprietors


bpartnerships


c public limited companies


d monopolies



Public limited companies may not maximize their profits because ?


a they are afraid of encouraging takeovers.


bshareholders have little control over managers.


c shareholders want higher dividends.


d both the first and third option.



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