For which type of organization is unlimited liability likely to be the greater problem-proprietorships or partnerships? Why?
What will be an ideal response?
Unlimited liability probably poses more problems for partnerships because each partner is liable for debts incurred by the firm, even if those debts are incurred by the other partner. A proprietor knows all the debts he or she has taken on, but a partner could be in the dark on some occasions.
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A movement from point J to point M would represent
A. an increase in consumer goods, but not capital goods.
B. an increase in capital goods, but not consumer goods.
C. an increase in both capital goods and consumer goods.
D. no increase in either capital goods or consumer goods.
Which of the following is most likely to be characterized by substantial asymmetric information?
a. a soft drink purchased in a vending machine b. a car wash to benefit the local high school band c. a collectible baseball card purchased on eBay d. wireless service that includes unlimited minutes and texting
Exiting from a peg is relatively ____ compared with exiting from a common currency, which would be ____.
A) difficult; impossible B) easy; more difficult and costly C) complex; simple D) rare; much more common
Suppose a positive technological change in the production of disease-resistant corn caused the price of corn to fall. Holding everything else constant, how would this affect the market for wheat (a substitute for corn)?
A) The supply of wheat would increase and the equilibrium price of wheat would decrease. B) The demand for wheat would decrease and the equilibrium price of wheat would decrease. C) The demand for wheat would increase because consumers could afford to buy more wheat and corn. D) The demand for wheat would decrease and the equilibrium price of wheat would increase.