Holt 7525-9 S15_IT

___ 13. Corporations:
a. are complex to form, to operate, and to dissolve
b. are subject to double taxation
c. are subject to problems caused by separation of ownership and control
d. All of the above
___ 14. Corporate managers:
a. are agents of the stockholders
b. will always pursue the stockholders’ goal of profit-maximization
c. Both of the above
d. Neither of the above
___ 15. A corporate bond:
a. is the same as a share of stock
b. is an ownership interest in the corporation
c. is a debt obligation of the corporation
d. Both a. and b. above
___ 16. If Firm Y has assets of $350 million and liabilities of $310 million, its net worth is:
a. $-40 million
b. $40 million
c. $350 million
d. $660 million
___ 17. A difference between private nonprofit firms and public nonprofit firms is:
a. private nonprofit firms have residual claimants
b. private nonprofit firms are financed by taxes
c. private nonprofit firms are more responsive to the desires of their customers and
contributors
d. All of the above
___ 18. According to “The Wealth of Nations”, a nation’s standard of living depends on:
a. the fruitfulness of its land
b. the abundance of its mineral resources
c. the productivity of its labor
d. All of the above
___ 19. According to Adam Smith, the human propensity to trade arises:
a. from the unique neediness of human beings
b. due to natural self-sufficiency of human beings
c. because of the natural human instinct to defraud one another
d. All of the above
___ 20. According to Adam Smith, the extent of the division of labor will be increased:
a. by an increase in the size of the market
b. by a decrease in transportation costs
c. Both of the above
d. Neither of the above
___ 21. Per capita income in U.S. states:
a. tends to be directly related to population density
b. tends to be inversely related to population density
c. tends to be unaffected by population density
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19 - 13 The Firm