Messitt and McNulty spend $50,000 each to form a law partnership. On the first day someone trips over a potted plant in their lobby and sues them for $400,000 . Which of the following is true?
a. If a $400,000 judgment is against the partnership, then each partner will have to pay $200,000.
b. If a $400,000 judgment is against the partnership and if McNulty cannot afford to pay any of it, then Messitt is liable for $400,000.
c. Messitt's liability is limited to $300,000 because she owns three quarters of the firm.
d. Each individual partner cannot be sued for more than $200,000.
e. Only McNulty is personally responsible for the damages because he was the one who put the potted plant in the office.
B
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A good that is both rival and exclusive is called
a. a private good b. a public good c. a quasi-private good d. an external good e. an open access good
Consider a firm with the following cost information: ATC = $15, AVC = $12, and MC = $14 . If we know that this firm has decided to produce Q = 20 by following the rule to maximize profits or minimize losses, then the price of the output is:
a. $12. b. $14. c. $15. d. $20.
Refer to the given table. Suppose the columns in this table reflect demand and supply. At a price of $30:Price Per UnitColumn A Units Per YearColumn B Units Per Year$2010040$309550$408060$506570$605080
A. the market will be in equilibrium. B. there will be an excess demand of 95 units. C. there will be an excess demand of 45 units. D. there will be an excess supply of 45 units.
Arbitrage is:
a. capital controls. b. interest rate management by the central bank. c. exploiting profit opportunities in the market resulting from price differences. d. investing in junk bonds or businesses that are not ethical.