ANSWERS TO TEST BANK QUESTIONS

Chapter 1: MANAGERS, PROFITS, AND MARKETS

1-1 a 1-11 d 1-21 e I-31 c
1-2 c 1-12 d 1-22 e I-32 a
1-3 a 1-13 e 1-23 a I-33 d
1-4 d 1-14 d 1-24 d I-34 e
1-5 c 1-15 d 1-25 d I-35 e
1-6 d 1-16 e 1-26 e I-36 d
1-7 a 1-17 d 1-27 d I-37 e
1-8 e 1-18 c 1-28 d I-38 c
1-9 a 1-19 a 1-29 e I-39 d
1-10 d 1-20 c 1-30 b I-40 d

1-1F a. $100,000; $75,000; $175,000

b. $275,000
c. $350,000
d. $237,500

1-2F a.
23,000,000 23,000,000 23,000,000 23,000,000
Value    
(1.12)1 (1.12) 2 (1.12)3 (1.12) 4
 20,535,714  18,335, 459  16,370,946  14,616,916
 $69,859,035
b. higher; decrease

1-3F a. $629,036; $629,036

b. $575,022; $575,022

1-4F a. industrial organization

b. business practices or tactics
c. behavior; profit
d. total revenue; accounting profit
e. economic
f. smaller
g. differentiated
h. larger
i. owner-supplied
j. shareholders; managers
k. hazard
l. control
m. outsiders; value (or price)
n. average cost
o. share
p. is not