Skip to ContentGo to accessibility page
OpenStax Logo
Principles of Microeconomics 3e

Review Questions

Principles of Microeconomics 3eReview Questions

Review Questions

9.

What are the most common ways for start-up firms to raise financial capital?

10.

Why can firms not just use their own profits for financial capital, with no need for outside investors?

11.

Why are banks more willing to lend to well-established firms?

12.

What is a bond?

13.

What does a share of stock represent?

14.

When do firms receive money from a stock sale in their firm and when do they not receive money?

15.

What is a dividend?

16.

What is a capital gain?

17.

What is the difference between a private company and a public company?

18.

How do the shareholders who own a company choose the actual company managers?

19.

Why are banks called “financial intermediaries”?

20.

Name several different kinds of bank account. How are they different?

21.

Why are bonds somewhat risky to buy, even though they make predetermined payments based on a fixed rate of interest?

22.

Why should a financial investor care about diversification?

23.

What is a mutual fund?

24.

What is an index fund?

25.

How is buying a house to live in a type of financial investment?

26.

Why is it hard to forecast future movements in stock prices?

27.

What are the two key choices U.S. citizens need to make that determines their relative wealth?

28.

Is investing in housing always a very safe investment?

PreviousNext
Order a print copy
Citation/Attribution
Reuse and redistribution of this content in digital or print format:
  • This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's prior written permission.
  • This book uses the Creative Commons Attribution-NonCommercial-ShareAlike License, which means that you can reuse and modify the material only for noncommercial purposes, must attribute OpenStax, and must distribute any derivative works under the same license.
  • Any commercial printing of this textbook, including using a local or custom printer, must be approved by OpenStax, and proper citation provided.
  • OpenStax-copyrighted images, activities, assessments, and similar components of this book are subject to the same licensing – CC-BY-NC-SA. They can be used for noncommercial purposes with attribution. Commercial use requires permission.
  • Permission requests: Anyone who intends to incorporate this content (including text, images, and other components) into large language models, use it in AI offerings, use it commercially (including in print), and/or has questions about another use case is welcome to complete our reuse request form.
Attribution information
  • If you are redistributing all or part of this book in a noncommercial print format, then you must include on every physical page the following attribution:

    Access for free at https://openstax.org/books/principles-microeconomics-3e/pages/1-introduction

  • If you are redistributing all or part of this book in a noncommercial digital format, then for every page that includes OpenStax content, you must license the derivative work under the same CC-BY-NC-SA license as the original, and include on every digital page view the following attribution:

    Access for free at https://openstax.org/books/principles-microeconomics-3e/pages/1-introduction

Citation information

The information below includes the information needed to generate citations in most major styles (APA, MLA, etc.); you must reformat and organize the information as needed to fit the requirements of the style. Use the information below to generate a citation. We recommend using a citation tool such as this one.

© Jul 9, 2026 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike License. The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo, and Rice University name, and Rice University logo trademarks, or wordmarks are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.