Questions

All exercises are available on MyEconLab; * = [&|eq|&] answer at the back of this book; C = [&|eq|&] use of calculus may be necessary.

1. Ownership and Governance of Firms  

  1. 1.1 What types of firms would not normally maximize profit?

  2. *1.2 Describe three important consequences of “going public” by selling shares in an initial public offering.

  3. 1.3 What types of firm organization allow owners of a firm to obtain the advantages of limited liability?

  4. 1.4 Has Chinese government control of industrial ­production declined significantly over the last several decades? Quantify your answer. (Hint: see the Mini-Case “Chinese State-Owned Enterprises.”)

2. Profit Maximization  

  1. 2.1 A firm has three different production facilities, all of ...

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