An institution that hires factors of production and then organizes those factors to produce and sell goods and services is a _______________.

profitable firm
wholesale firm
retail firm
firm

An employee who does not work diligently unless constantly supervised and believes that he is underpaid is an example of __________________.

inefficient hiring practices
marginal returns to work
the principle-agent problem
the law of diminishing returns

Firms employing fewer than 10 employees account for ______________ per cent of all firms in most European countries.

approximately 17
fewer than 90
just more than 1
just under 1

Any method of producing a good or service is ________. It _______ the maximum profit that a firm can make.

a technology; limits
an information constraint; limits
a technology; always increases
an information constraint; always increases

When commands pass downward through a managerial hierarchy, _______ system exists.

a communist
a command
a free market
an incentive

An organization that has a large sales force most likely organizes production with _______.

a market system
an incentive system
threats of unemployment if quotas are not met
a command system

Owners of _______ have limited liability.

partnerships and corporations
corporations
partnerships, proprietorships, and corporations
proprietorships and partnerships

The economic depreciation of a piece of capital is part of the _______ of using the capital.

average cost
marginal cost
opportunity cost
sunk cost

The economic depreciation of a piece of capital is part of the _______ of using the capital.

average cost
marginal cost
opportunity cost
sunk cost

Economies of scale exist when the _______ a unit of a good ___________.

price of; rises as its output rate increases
cost of producing; rises as its input rate increases
cost of producing; falls as its output rate increases
price of; falls as its input rate decreases