What is the primary difference between a sole proprietorship and a partnership?
A) Partnerships have more owners than do proprietorships.
B) Partnerships can issue stocks and bonds while proprietorships cannot.
C) Proprietorships have unlimited liability while partnerships have limited liability.
D) There is no real difference between the two types of firms.
A
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What is the analytically correct way to allocate joint costs or to determine the specific costs of products produced jointly (such as the view and the food from a restaurant with an excellent view)?
A) By comparing marginal costs B) By comparing all costs other than sunk costs C) By subtracting the total costs from the total revenue D) By using the prevailing interest rate to discount the stream of expected future costs and benefits E) There is no analytically correct way to do so.
Barter is an inefficient means of exchange because
A) barter transactions require a double coincidence of wants. B) barter only occurs in relatively primitive economies. C) demand will not necessarily equal supply. D) in a barter transaction only one party needs to want what the other party has to sell.
The largest percentage of federal income tax revenue in the United States is paid by the
A) middle income taxpayers. B) highest income taxpayers. C) lowest income taxpayers. D) All groups of taxpayers—low income, high income and middle income—pay the same percent of federal income taxes.
Demand and supply in the wheat market are given by:
QD = 2000 - 1000 P and QS = -500 + 1000 P where Q is millions of bushels and P is price per bushel. a. Find the equilibrium price and quantity. b. Suppose that the government wishes to support farm income and thus sets a price floor of $1.50/bushel. Find the size of the farm surplus. c. What is the cost of this program to the government?