Bondholders have a "prior claim" over stockholders on a company's earnings or its assets
a. True
b. False
Indicate whether the statement is true or false
True
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If you are willing to purchase a house for $300,00 . and you purchase the house for $275,000 . this transaction will generate:
a. There is no surplus created b. $25,00 . worth of seller surplus and unknown amount of buyer surplus c. $10,00 . worth of buyer surplus and $15,00 . of seller surplus d. $25,00 . worth of buyer surplus and unknown amount of seller surplus
When stockholders receive dividends in proportion to the quantity of stock they own, this is called
a. corporate loss b. preferred stock c. common stock d. retained earnings e. limited liability
The ultimatum game reveals that
a. it does not make sense to try to maximize profits. b. people may have an innate sense of fairness that economic theory does not capture. c. offering someone a wildly unfair outcome is usually ok since people tend to make decisions using a "something is better than nothing" philosophy. d. Both a and b.
A key consideration in the government's decision in the Staples/Office Depot case was that:
A. Staples charged lower prices in locations that were close to an Office Depot store. B. Staples charged higher prices in locations that were close to an Office Depot store. C. Staples and Office Depot had engaged in explicit price fixing. D. Staples and Office Depot would be a natural monopoly if they were allowed to merge.