Kenneth R. Szulczyk
Chapter Questions
- Explain why sole proprietorships are usually small businesses.
- Identify the benefits of incorporating a business.
- Board of directors of a corporation needs more funding to invest in a new factory. However,
they do not want to issue more common stock because it would weaken the majority
shareholders' position. Identify the board’s options. - Could a corporation use a subsidiary to hide debt or manipulate its financial statements?
- You bought stock for a new internet company for $25 per share last year and paid a $0.50
dividend per share. Unfortunately, the company faces bankruptcy, and you quickly sell your
shares for $15. Calculate your rate of return for this investment. - Did the U.S. federal government fix corporate fraud after passing the Sarbanes-Oxley Act in
2002? - Could a bank that becomes a member of a Keiretsu create problems for the entire company?
- Does the principal-agent problem exist if a university pays a commission to an enrollment
counselor who enrolls students in the university? - Distinguish between a third-world country and an emerging economy.
- Could a country produce within the interior of a production possibilities curve?
- Identify the benefits for a business to expand into a growing country like China.
- Is outsourcing a form of free trade?
- You have two countries: Bosnia and Herzegovina and Colombia. Both countries grow
tobacco and coffee. Two countries can produce a maximum with their resources in the table.
Production Tobacco Coffee
Bosnia and Herzegovina 1,000 500
Colombia 500 1,000Please draw the two PPCs with the production set at the half-way point. Identify the gain of
production if the two countries engage in free trade.