Economics - True or False

Question 1

Corruption is when engaging in anti-competitive activities.
True or False?

Answer 1

False

Corruption typically refers to dishonest or fraudulent conduct by those in power, such as bribery, embezzlement, or misuse of public funds.

Question 2

The concept Circular Economy emphasizes the importance of the financial
resources in a business being reinvested in the business.
True or False?

Answer 2

False

The concept of Circular Economy emphasizes the importance of minimizing waste, promoting sustainability, and maximizing the efficient use of resources.
It focuses on reducing the consumption of finite resources and minimizing environmental impact by designing products and systems that can be reused, repaired, remanufactured, and recycled.

Question 3

The right to life and liberty, equality before the law, and freedom of speech is
included in Civil and Political Rights.
True or False?

Answer 3

True

Question 4

By social dialogue stated in ISO 26000 is meant negotiations, consultations or
information exchanges.
True or False?

Answer 4

True

Question 5

European Institute for Gender Equality’s index measures gaps between the gendersconcerning work, time, money, power, knowledge and health.
True or False?

Answer 5

True

Question 6

Gender equality refers to the process of classifying women and men as different from each other
True or False?

Answer 6

False

Gender equality refers to the equal rights, responsibilities, and opportunities of women and men, girls, and boys. It involves the removal of discrimination and biases based on gender and ensuring that both genders have the same opportunities for realizing their full potential in all aspects of life, including social, economic, political, and cultural spheres. It’s about recognizing and valuing the diversity between individuals rather than classifying them as different based on gender.

Question 7

Products can be pure goods and pure services as well as combinations of goods and services.
True or False?

Answer 7

True

Question 8

Value-based pricing is when a company with a strong brand and a unique product or service can base the price on how much the customer is willing to pay.
True or False?

Answer 8

True

Question 9

Production planning and production control are synonyms and are both about
having a disturbance-free production.
True or False?

Answer 9

False

• Production planning involves determining what products to produce, in what quantities, and by what methods.
• Production control, on the other hand, involves monitoring and regulating the actual production process to ensure that it proceeds according to the planned schedule and meets quality standards.

While both production planning and production control aim to achieve efficient and disturbance-free production, they focus on different stages of the production process and involve distinct sets of activities.

Question 10

In successful, technology-intensive companies, the largest competitive advantage of the company is normally considered to consist of core competencies.
True or False?

Answer 10

True

Question 11

A good strategy works regardless of the situation in the business environment.
True or False?

Answer 11

False

A good strategy is not universally applicable in all situations and business environments. Instead, a good strategy is one that is tailored to the specific circumstances, challenges, and opportunities faced by a company within its industry and market context.

Question 12

The demand-control model explains that as long as the employee feels that s/he has
control in a work situation, s/he will feel good and develop.
True or False?

Answer 12

False

The demand-control model suggests that job strain arises from the combination of high job demands and low job control. According to this model, employees experience stress and negative health outcomes when they face high demands in their work environment but have little control over how they perform their tasks.

Question 13

Economics, and especially financial management, entail managing scarce or limited resources.
True or False?

Answer 13

True

Question 14

Revenues - expenses = profit
True or False?

Answer 14

True

Question 15

The variable unit cost decreases as the volume of activity increases.
True or False?

Answer 15

True

The cost per unit decreases with volume since the fixed costs are spread over more units.

Question 16

Total revenues - fixed costs = Contribution margin
True or False?

Answer 16

False

Total revenues - variable costs = Contribution margin

Question 17

Total contribution margin / Total revenues = Contribution margin ratio
True or False?

Answer 17

True

Question 18

Fixed costs / Contribution margin ratio = Break-even point
True or False?

Answer 18

True

Question 19

Cost objects can only consist of physical goods, such as machinery, equipment, and cars.
True or False?

Answer 19

False

Cost objects can include both physical goods and services, as well as activities, projects, or any other item for which costs are being measured or assigned.

Question 20

A differential cost is a cost that arises or disappears for a particular course of action in a decision-making situation!
True or False?

Answer 20

True

A differential cost(särkostnad) is indeed a cost that arises or disappears for a particular course of action in a decision-making situation. It represents the difference in total costs between two alternatives.

Question 21

With idle capacity, the decision rule is to accept if the incremental revenues exceed the incremental costs!
True or False?

Answer 21

True

With idle capacity, the decision rule is typically to accept a decision if the incremental revenues (särkostnader) exceed the incremental costs (samkostnader). This means that if the additional revenues gained from accepting a decision are greater than the additional costs incurred, it is usually economically beneficial to accept the decision.

Question 22

Opportunity cost is the surplus lost from the best alternative use of a scarce resource!
True or False?

Answer 22

True

Opportunity cost refers to the potential benefit that is forfeited when one alternative is chosen over another. It represents the value of the next best alternative forgone.

Question 23

Depreciation costs do not occur in connection with the preparation of profit budgets.
True or False?

Answer 23

True

Depreciation costs typically do not directly affect the preparation of profit budgets because they are non-cash expenses and are usually excluded from profit calculations.

Question 24

The result of a period is defined as income subtracted by expenditures.
True or False?

Answer 24

False

The result of a period is typically defined as revenues minus expenses, not income subtracted by expenditures.

Question 25

Double entry bookkeeping implies that one account is debited and one account is credited. True or False?

Answer 25

True

Question 26

When the unrestricted equity exceeds the share capital, the company has to increase the share dividend. True or False?

Answer 26

False When unrestricted equity exceeds the share capital, it doesn't necessarily mean the company has to increase the share dividend. The decision to increase dividends is based on various factors, including company performance, cash flow, future investment opportunities, and shareholder expectations.

Question 27

The share capital is restricted True or False?

Answer 27

False Share capital represents the funds contributed by shareholders to a company in exchange for ownership. While there may be regulations or restrictions on how this capital can be used, the capital itself is not inherently restricted.

Question 28

The income statement includes share dividend. True or False?

Answer 28

False The income statement typically does not include share dividends. Dividends are usually recorded in the statement of changes in equity or in the cash flow statement when they are declared and paid.

Question 29

The sum of the company’s total assets is equal to the sum of equity and liabilities. True or False?

Answer 29

True

Question 30

Current assets include accounts receivable and inventory. True or False?

Answer 30

True

Question 31

The preparation of financial statements includes determination of assets and liabilities. True or False?

Answer 31

True

Question 32

Costs can occur without a payment being made. True or False?

Answer 32

True

Question 33

Key performance indicators are always financial in nature and include information from both the Income Statement as well as the Balance Sheet. True or False?

Answer 33

False While key performance indicators (KPIs) can include financial metrics, they are not always financial in nature. KPIs can also encompass non-financial metrics such as customer satisfaction scores, employee turnover rates, production efficiency ratios, and more.

Question 34

The acid test ratio (liquidity) includes information from the Income Statement. True or False?

Answer 34

False The acid-test ratio, also known as the quick ratio, is a liquidity ratio that measures a company's ability to pay off its current liabilities with quick assets. Quick assets typically include cash, cash equivalents, and accounts receivable. This ratio does not directly incorporate information from the Income Statement; instead, it focuses on the balance sheet items to assess short-term liquidity.

Question 35

The profit margin increases when a company pays accounts payable. True or False?

Answer 35

False The payment of accounts payable does not directly affect the profit margin. The profit margin is calculated by dividing net income by total revenue and is a measure of how much profit a company generates for each dollar of revenue. Paying accounts payable affects the company's cash position and liquidity but does not impact the calculation of the profit margin.

Question 36

There are no personal financial risks in owning a sole proprietorship. True or False?

Answer 36

False If the business goes bankrupt or faces legal penalties, the owner may be personally liable for the company's debts. This means there are personal financial risks associated with owning a sole proprietorship.

Question 36

A cost, expense, and payment can never occur simultaneously. True or False?

Answer 36

True A cost, expense, and payment typically occur at different points in time. For example, a cost may be incurred when a resource is consumed or when a service is provided, while an expense is recognized when the cost is matched with revenues, and a payment is made when funds are disbursed.

Question 37

The annual profit of a corporation does not automatically go to the owners. Any profit is instead retained by the company and may be distributed to the owners later as dividends. True or False?

Answer 37

True

Question 38

A company's profit = revenues - expenses.

Answer 38

True

Question 39

A cost is a periodized expenditure. True or False?

Answer 39

False A cost is the amount of money or resources incurred for producing or acquiring a good, service, or asset. It represents the value of resources sacrificed to achieve a specific purpose.

Question 40

There is always a cost associated with paying for a good.

Answer 40

False

Question 41

If a company has a net profit margin of 9%, it means that the company gets to keep 9% of its revenue in profit after all the company's expenses are deducted.

Answer 41

True