People enjoy outdoor holiday lighting displays and would be willing to pay to see these displays but can't be made to pay. Because those who put up lights are unable to charge others to view them, they don't put up as many lights as people would
like. This is an example of a:
A. negative externality.
B. supply-side market failure.
C. demand-side market failure.
D. government failure.
Answer: C
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If two partners have a firm with more debt than assets,
a. the business is a success b. the partners are equally liable for the debt c. there is a limit to their personal liability d. each one's liability is limited to the investment made in the business e. the burden of debt is proportionate to the partners' original investment
A nation's country-risk premium increases if:
a. Central bank policies become more predictable. b. Large corporations, on average, increase their debt-to-equity ratios, thereby making their operations more volatile. c. Expected inflation becomes harder to predict. d. The average maturity structure in the nation rises. e. Its government becomes more stable.
The demand for a product is likely to be more elastic:
A. the smaller the share of the total budget spent on the product. B. when more complementary products are available. C. in the short run than in the long run. D. when more good substitutes for the product are available.
If people have never implemented an idea that you believe offers substantial opportunity:
A. your evaluation might be missing something and you should carefully revisit the first three economists' questions. B. you should conclude that you are being irrational. C. you should conclude people are irrational. D. you should seek a low interest loan immediately in order to launch your product.