Briefly discuss three reasons why firms may borrow funds from a bank
What will be an ideal response?
Many firms rely on bank loans to meet their short-term needs for credit, such as funds to pay for inventories or to meet their payrolls. Many firms rely on bank loans to bridge the gap between the time they must pay for inventories or meet their payrolls and when they receive revenues from the sales of goods and services. Some firms also rely on bank loans to meet their long-term credit
needs, such as funds they require to physically expand the firm.
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If the production possibilities curve is a straight line,
A. opportunity costs rise as output of either commodity is expanded. B. resources are not equally productive in the production of both goods. C. opportunity costs are negative. D. resources can be moved from the production of one good to production of others with no loss of productivity.
Which of the following can create a monopoly? I. high prices II. public franchise III. patent IV. government license
A) I and II B) I and III C) I, II and III D) II, III and IV
Two social institutions that are essential for trade to be organized are ________
A) property rights and laws B) markets and banks C) businesses and banks D) markets and property rights
Refer to Table 2-5. Assume Nadia's Neckware only produces ascots and bowties. A combination of 8 ascots and 18 bowties would appear
A) along Nadia's production possibilities frontier. B) inside Nadia's production possibilities frontier. C) outside Nadia's production possibilities frontier. D) at the horizontal intercept of Nadia's production possibilities frontier.