Section 1 Multiple-choice questions (Total 30 points) Circle the most appropriate answer for each question. 1. Which of the following classifications of firms is most likely to comprise cyclical firms? A. Airlines B. Drug stores. C. Fast food outlets. 2. Alpha Corp. has a current ratio above 1 and a quick ratio less than 1. Which of the following actions will increase the current ratio and decrease the quick ratio? A. buys fixed assets on credit. B. uses cash to purchase inventory. C. pays off accounts payable from cash. 3. A company is most likely to earn high economic profits if it is operating in an industry characterized by: A. low industry concentration, low barriers to entry, and low industry capacity. B. high industry concentration, high barriers to entry, and low industry capacity. C. low industry concentration, high barriers to entry, and high industry capacity