BUSI 100 MIDTERM 1 QUESTIONS AND ANSWERS
T/F? In 1970, Andrew Carnegie wrote an influential article in the New York Times
arguing "there is one and only one social responsibility of business - to increase its
profits without deception or fraud." - Answers - FALSE; Milton Friedman said this, not
Carnegie
Friedman argues that an executive exercising social responsibility to divert stockholders'
money to a social cause the executive values is, in essence, reflective of what famous
battle cry from the American Revolution? - Answers - Taxation without representation
The key agrument in Friedman's essay is that the manager is the _____ of the
individuals who own the corporation and her primary responsibility is to them. - Answers
- Agent
Milton Friedman believed the managers of a large, publicly-owned corporation should
invest the corporation's resources in which of the following ways? - Answers - Only for
the benefit of the corporation's stockholders
During an in-class exercise several weeks ago, we determined that the insider
ownership percentage for most large firms in the U.S. is in what range? - Answers - 0%
< x < 10%
Which of the following words could be defined as "the amount of sales in a period for
which a company has fulfilled all of its performance obligations?" - Answers - Revenues
(Poll Everywhere answer was none of the above)
When preparing the statement of cash flows, we divide cash flows into three categories.
Which of the following is not one of the categories?
Investing
Financing
Revenue
Operating - Answers - Revenue
Define "assets" in accounting - Answers - The company's available resources to create
future economic benefits
Ayn Rand notes "Money is a living power that dies without its root. Money will not serve
the mind that cannot match it." Which other author have we read in class that also
speaks about this idea of who is best fit to spend money? - Answers - Andrew Carnegie
T/F? According to Ayn Rand, when men live by trade with force as the final judge, the
best product/performance will win. - Answers - False
, In a free society, which of the following statements is Ayn Rand most likely to agree
with? - Answers - Money is a tool of exchange, which permits men to trade with one
another
According to John Burr Williams, what do all prices utlimately depend on? - Answers -
Someone's estimate of future income
T/F? John Burr Williams would agree that company earnings, not dividends, are the
primary consideration in determining investment value. - Answers - False
T/F? John Burr Williams defines investment value of company stock as the present
worth of that company's future dividends. - Answers - True
Which author that we have read is most likely to have also said: "The problem of the
20th century is the problem of the color line - the relation of the darker to the lighter
races of men." - Answers - W.E.B. Du Bois (the first African-American to earn a PhD
from Harvard)
In The Souls of Black Folk, W.E.B. Du Bois writes, "The keynote of the Black Belt is
debt." What does he describe this debt to be? - Answers - The continued inability for the
population to have their income cover their expenses
According to Du Bois, which of the following statements about debt in the Black Belt is
false? - Answers - Debt was mostly in the form of commercial credit
According to TripAdvisor, what is the #1 rated restaurant in Chapel Hill? - Answers -
Sunrise Biscuit Kitchen
Class participation accounts for 10% of student grades and has several different inputs.
Which of the following is NOT considered when determining each student's class
participation score? - Answers - Student Attendance
Why did Adam Smith believe that tariffs and import restrictions might be harmful to the
domestic economy? - Answers - They cause capital to be inefficiently employed
T/F? Plato's belief that "one man is naturally fitted for one task, and another for another"
aptly describes the economic concept of specialization of labor. - Answers - True
T/F? John Stuart Mill asserts that the rate of profit greatly exceeds the rate of interest
because it also compensates for the risk and the exertion of the capitalist. - Answers -
True
Bacon discusses the role of usury in the economy. Which of the following is a reason he
gives for why usury should not be completely abolished? - Answers - Borrowing without
interest would lead to numerous economic inconveniences.
T/F? In 1970, Andrew Carnegie wrote an influential article in the New York Times
arguing "there is one and only one social responsibility of business - to increase its
profits without deception or fraud." - Answers - FALSE; Milton Friedman said this, not
Carnegie
Friedman argues that an executive exercising social responsibility to divert stockholders'
money to a social cause the executive values is, in essence, reflective of what famous
battle cry from the American Revolution? - Answers - Taxation without representation
The key agrument in Friedman's essay is that the manager is the _____ of the
individuals who own the corporation and her primary responsibility is to them. - Answers
- Agent
Milton Friedman believed the managers of a large, publicly-owned corporation should
invest the corporation's resources in which of the following ways? - Answers - Only for
the benefit of the corporation's stockholders
During an in-class exercise several weeks ago, we determined that the insider
ownership percentage for most large firms in the U.S. is in what range? - Answers - 0%
< x < 10%
Which of the following words could be defined as "the amount of sales in a period for
which a company has fulfilled all of its performance obligations?" - Answers - Revenues
(Poll Everywhere answer was none of the above)
When preparing the statement of cash flows, we divide cash flows into three categories.
Which of the following is not one of the categories?
Investing
Financing
Revenue
Operating - Answers - Revenue
Define "assets" in accounting - Answers - The company's available resources to create
future economic benefits
Ayn Rand notes "Money is a living power that dies without its root. Money will not serve
the mind that cannot match it." Which other author have we read in class that also
speaks about this idea of who is best fit to spend money? - Answers - Andrew Carnegie
T/F? According to Ayn Rand, when men live by trade with force as the final judge, the
best product/performance will win. - Answers - False
, In a free society, which of the following statements is Ayn Rand most likely to agree
with? - Answers - Money is a tool of exchange, which permits men to trade with one
another
According to John Burr Williams, what do all prices utlimately depend on? - Answers -
Someone's estimate of future income
T/F? John Burr Williams would agree that company earnings, not dividends, are the
primary consideration in determining investment value. - Answers - False
T/F? John Burr Williams defines investment value of company stock as the present
worth of that company's future dividends. - Answers - True
Which author that we have read is most likely to have also said: "The problem of the
20th century is the problem of the color line - the relation of the darker to the lighter
races of men." - Answers - W.E.B. Du Bois (the first African-American to earn a PhD
from Harvard)
In The Souls of Black Folk, W.E.B. Du Bois writes, "The keynote of the Black Belt is
debt." What does he describe this debt to be? - Answers - The continued inability for the
population to have their income cover their expenses
According to Du Bois, which of the following statements about debt in the Black Belt is
false? - Answers - Debt was mostly in the form of commercial credit
According to TripAdvisor, what is the #1 rated restaurant in Chapel Hill? - Answers -
Sunrise Biscuit Kitchen
Class participation accounts for 10% of student grades and has several different inputs.
Which of the following is NOT considered when determining each student's class
participation score? - Answers - Student Attendance
Why did Adam Smith believe that tariffs and import restrictions might be harmful to the
domestic economy? - Answers - They cause capital to be inefficiently employed
T/F? Plato's belief that "one man is naturally fitted for one task, and another for another"
aptly describes the economic concept of specialization of labor. - Answers - True
T/F? John Stuart Mill asserts that the rate of profit greatly exceeds the rate of interest
because it also compensates for the risk and the exertion of the capitalist. - Answers -
True
Bacon discusses the role of usury in the economy. Which of the following is a reason he
gives for why usury should not be completely abolished? - Answers - Borrowing without
interest would lead to numerous economic inconveniences.
