Question 1

If a business is owned by_________it is called a _________

Accepted Answer

A)   customers; sole proprietor
B)   the state; public corporation
C)   shareholders; co- operative
D)   one person; partnershipE) A) and B)
F) A) and C)

Question 2

A divorce of ownership from control creates problems such as

Accepted Answer

A)   there are no problems as this gives the owner time to do other things.
B)   conflicts between the objectives of managers and owners.
C)   tax revenues may be lower.
D)   managers may be better at running the business than the owner, thus removing the owner from the decision- making process.E) None of the above
F) C) and D)

Question 3

If a business is owned by _________it is called a _________.

Accepted Answer

A)   two or more people; public corporation
B)   customers; partnership
C)   one person; co- operative
D)   shareholders; public limited companyE) All of the above
F) A) and B)

Question 4

A company where ownership is distributed between a large number of shareholders is called a joint- stock company.

Accepted Answer

A) True 
 B)False

Question 5

Transaction costs are caused by

Accepted Answer

A)   the need to monitor contracts.
B)   the complexity of contracts.
C)   imperfect knowledge.
D)   all of the aboveE) A) and B)
F) None of the above

Question 6

If we employ someone to carry out our wishes, the resulting conflict of interest is known by economists as the

Accepted Answer

A)   separation of ownership and control.
B)   conflict of interest.
C)   fallacy of composition.
D)   principal- agent problem.E) A) and B)
F) A) and D)

Question 7

What are transaction costs?

Accepted Answer

These are costs incurred when ...

Question 8

Which of the following statements is false?

Accepted Answer

A)   Firms that are too cautious are unlikely to be forced out of an industry.
B)   Trying to maximise any objective is a risky strategy.
C)   In order to survive, firms should balance caution against keeping up with competitors.
D)   Firms may become cautious if they are too concerned with survival.E) A) and C)
F) B) and D)

Question 9

Transaction costs are the main reason for organising production within firms rather than using the market.

Accepted Answer

A) True 
 B)False

Question 10

What is the difference between M- form and U- form organisations?

Accepted Answer

M- form is where separate divisions are ...

Exam 3: Business Organisations

Which of the following statements is false?

Correct Answer
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What are transaction costs?

Correct Answer
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These are costs incurred when ...
View Answer

A company where ownership is distributed between a large number of shareholders is called a joint- stock company.

Correct Answer
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Transaction costs are the main reason for organising production within firms rather than using the market.

Correct Answer
verified

What is the difference between M- form and U- form organisations?

Correct Answer
verified
M- form is where separate divisions are ...
View Answer

A divorce of ownership from control creates problems such as

Correct Answer
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If we employ someone to carry out our wishes, the resulting conflict of interest is known by economists as the

Correct Answer
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If a business is owned by_it is called a _

Correct Answer
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Transaction costs are caused by

Correct Answer
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If a business is owned by _it is called a _.

Correct Answer
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Exam 3: Business Organisations

Which of the following statements is false?

Correct AnswerverifiedShow Answer

What are transaction costs?

Correct AnswerverifiedThese are costs incurred when ...View AnswerShow Answer

A company where ownership is distributed between a large number of shareholders is called a joint- stock company.

Correct AnswerverifiedShow Answer

Transaction costs are the main reason for organising production within firms rather than using the market.

Correct AnswerverifiedShow Answer

What is the difference between M- form and U- form organisations?

Correct AnswerverifiedM- form is where separate divisions are ...View AnswerShow Answer

A divorce of ownership from control creates problems such as

Correct AnswerverifiedShow Answer

If we employ someone to carry out our wishes, the resulting conflict of interest is known by economists as the

Correct AnswerverifiedShow Answer

If a business is owned by_________it is called a _________

Correct AnswerverifiedShow Answer

Transaction costs are caused by

Correct AnswerverifiedShow Answer

If a business is owned by _________it is called a _________.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
These are costs incurred when ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
M- form is where separate divisions are ...
View Answer

Correct Answer
verified

Correct Answer
verified

If a business is owned by_it is called a _

Correct Answer
verified

Correct Answer
verified

If a business is owned by _it is called a _.

Correct Answer
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