Which of the Following Statements Is False

question 43

Multiple Choice

Which of the following statements is false?

• A) In many other countries, the central conflict is between what are called "controlling shareholders" and "minority shareholders."
• B) Controlling shareholders can make decisions that benefit them disproportionately relative to the minority shareholders, such as employing family members rather than the most talented managers or establishing contracts favourable to other family-controlled firms.
• C) As recent events and corporate scandals have shown, investor protection in the United States is generally seen as substandard when compared to the developed economies in the world.
• D) Much of the focus in the United States is on the agency conflict between shareholders, who own the majority of a firm but are a dispersed group, and managers, who own little of the firm and must be monitored.

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Definitions:

Total Revenue

The overall income generated by a firm from its sales activities before any costs or expenses are subtracted.

Normal Return

The minimum profit necessary for a company to remain in business, often equated to covering opportunity costs.

Total Fixed Costs

The sum of all costs required to produce any output, assuming they remain constant regardless of the level of production.

Fixed Costs

are expenses that do not change in response to the level of goods or services produced by a business, like rent or salaries.