Which of the Following Statements Is True Regarding the Board

question 42

Multiple Choice

Which of the following statements is true regarding the board of directors?

• A) The board is charged by law to act with due care.
• B) If a director or the board as a whole fails to act with due care and, as a result, the corporation is in some way harmed, the careless director or directors can be held personally liable for the harm done.
• C) Director liability insurance is often needed to attract people to become members of boards.
• D) Directors must be aware of the needs of various constituent groups to balance all their interests.
• E) all of the above

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Definitions:

Marginal Resource Cost

Marginal Resource Cost is the additional cost incurred by obtaining one more unit of a resource, such as labor or raw materials, used in the production of goods and services.

Profits

The financial gain realized when the revenues from business activities exceed the expenses, costs, and taxes needed to sustain the activity.

MRP Curve

Short for Marginal Revenue Product curve, which represents the additional revenue a firm earns by employing one more unit of input, assuming other factors remain constant.

Imperfectly Competitive

Describes markets where the conditions necessary for perfect competition are not met, due to factors like monopolies, oligopolies, or monopolistic competition.