Firms exist because of __________________.

incentive systems
the principal-agent problem
command systems
scarcity

A major disadvantage of a proprietorship is that the __________________.

owner's entire wealth is at risk
profits are taxed twice
owner has limited liability
firm has perpetual life

The five-firm concentration ratio is smaller in _______ market than in a _______ market.

a monopolistic; perfectly competitive
an oligopolistic; perfectly competitive
a monopolistic; monopolistic competitive
a perfectly competitive; monopolistic

Lucinda starts a business consulting company. She makes all the management decisions and bears the risk of running the business. Lucinda expects to receive ________________.

economic profit
normal profit
revenue greater than her opportunity cost
revenue greater than the capital investment

Total revenue minus the sum of implicit and explicit costs is equal to _______ profit.

entrepreneurial
economic
normal
opportunity

Emma owns a firm that produces raincoats. Currently, Emma produces 25 raincoats a day. Emma cannot produce more raincoats in a day unless she purchases another sewing machine. Emma is _______ efficient.

consumer
technologically
economically
entrepreneurially

All of the following statements are false except ___________________.

economic efficiency implies technological efficiency
economic efficiency implies maximum output with maximum inputs
technological efficiency implies economic efficiency
technological efficiency implies the lowest costs of production

Andy wants to purchase a golden retriever. Andy buys newspapers to read the classified advertisements and he buys dog magazines to check out the locations of golden retriever breeders. Andy has incurred the _______ costs of making a purchase.

transactions
buying
market
private

A firm that hires various specialists to work on a range of projects experiences ___________________.

economies of scope
economies of scale
increasing economic profit
increasing normal profit

_______ coordinate most of our economic activity because firms can _______.

Firms and not markets; organize efficient team production
Firms and markets; organize efficient team production
Firms and markets; reap economies of scale
Markets; have a principal-agent problem