Explain how economic efficiency influences a corporation.
What will be an ideal response?
The corporation's success is measured by its economic efficiency and competitive effectiveness, which
leads to social betterment. Society benefits or the public good is increased, when there is an improved use
of scarce resources. This does not mean cutting corners and producing poor-quality products or providing
unsafe working conditions for employees. But it does involve the substitution of capital for labour and
making use of the economies of scale, scope, and experience. Abuses will be avoided if effective markets
exist, and economic efficiency differs from self-interest in that business must operate within market
constraints.
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A ________ offering consists of two parts: a naked solution and discretionary options
A) differentiated market B) flexible market C) rigid market D) vertical market E) horizontal market
Viral marketing primarily uses which of the following communication channels?
A) billboards B) print media C) radio D) cable television E) the Internet
Juanita is a new college graduate involved in the job search process. What advice will you give her concerning the physical appearance of résumés and accompanying application letters she will mail to potential employers?
a. Color and type of paper can vary between the two documents. b. A one-page format is typically recommended for both documents. c. Most employers will overlook slight errors in punctuation, but spelling should be perfect. d. All of the above
In January, 2002, Jones Company issues a pure-discount bond with a promised payment of X=$1000 that matures in T=5 years. The market price of the bond is P=$777 . The bond is default- risky. Specifically, the probability is 0
8 that Jones Company will pay the full amount of X at maturity, and is 0.2 that the firm will default, in which case the payoff to bondholders will be only $555 . Calculate the bond's promised yield to maturity, y, and expected return to maturity, rD. y rD a. 8.18% 5.18% b. 5.18% 5.18% c. 8.18% 3.23% d. 5.18% 3.23% e. 5.18% 1.57% FORMULAS: y = [X/P]1/T –1; rD = [E(PAY)/P]1/T –1, where E(PAY)= p[X] + (1-p)[X']