Which of the following is an advantage of starting a new business as a corporation?
A) ease in setting up B) low expenses of legally organizing
C) double taxation D) greater ability to raise funds
D
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Refer to the figure below. Suppose the solid line shows the demand for coffee. If coffee and tea are substitutes, and the price of tea falls, then you would expect: 
A. an increase in the quantity of coffee demanded, but no shift in the demand curve. B. the demand curve to shift to D(B) C. the demand curve to shift to D(A). D. a decrease in the quantity of coffee demanded, but no shift in the demand curve.
The market for used cars is shown in the above figure. Neither buyers nor sellers can tell whether any given car is a lemon. Forty percent (40%) of all cars are lemons. Which of the following statements is TRUE?
A) All of the cars will be sold at $1,600. B) No cars will be sold. C) Only lemons are sold for $1,000. D) Only good cars will be sold for $2,000.
Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. Two possible consumption bundles that Country A could produce are:
A. (5,000 bananas, 1,000 tomatoes) and (1,000 bananas, 5,000 tomatoes) B. (5,000 bananas, 0 tomatoes) and (2,500 bananas, 500 tomatoes) C. (2,500 bananas, 500 tomatoes) and (1,250 bananas, 800 tomatoes) D. (2,500 bananas, 750 tomatoes) and (1,250 bananas, 750 tomatoes)
According to public choice theorists, people behave differently in the market sector than in the public sector because
A) the more people there are in the market sector the less influence they are able to exert, whereas the more people there are in the public sector the more influence they are able to exert. B) the fewer people there are in the market sector the less influence they are able to exert, whereas the fewer people there are in the public sector the more influence they are able to exert. C) self-interest is the motivating force in the market sector, whereas altruism is the motivating force in the public sector. D) altruism is the motivating force in the market sector, whereas self-interest is the motivating force in the public sector. E) institutional arrangements are different in the two sectors.