Econ 550 Quiz Essay

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* Question 1 4 out of 4 points | | | Possible goals of Not-For-Profit (NFP) enterprises include all of the following EXCEPT:Answer | | | | | Selected Answer: | maximize total costs | Correct Answer: | maximize total costs | | | | | * Question 2 4 out of 4 points | | | To reduce Agency Problems, executive compensation should be designed to:Answer | | | | | Selected Answer: | create incentives so that managers act like owners of the firm. | Correct Answer: | create incentives so that managers act like owners of the firm. | | | | | * Question 3 4 out of 4 points | | | The primary objective of a for-profit firm is to ___________.Answer | | | | | Selected Answer: | maximize shareholder value | Correct Answer: | maximize shareholder value | | | | | * Question 4 4 out of 4 points | | | In the shareholder wealth maximization model, the value of a firm's stock is equal to the present value of all expected future ____ discounted at the stockholders' required rate of return.Answer | | | | | Selected Answer: | profits (cash flows) | Correct Answer: | profits (cash flows) | | | | | * Question 5 4 out of 4 points | | | Shirking of one’s duties is often encountered in team production settings becauseAnswer | | | | | Selected Answer: | teammates face a dilemma posed by a dominant strategy to shirk | Correct Answer: | teammates face a dilemma posed by a dominant strategy to shirk | | | | | * Question 6 4 out of 4 points | | | The Saturn Corporation (once a division of GM) was permanently closed in 2009. What went wrong with Saturn?Answer | | | | | Selected Answer: | Saturn sold cars below the prices of Honda or Toyota, earning a low 3% rate of return. | Correct Answer: | Saturn sold cars below the prices of Honda

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