Which of the following is an advantage of starting a new business as a corporation?
A) double taxation
B) ease in setting up
C) low expenses of legally organizing
D) greater ability to raise funds
Answer: D
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The payoffs for financial derivatives are linked to
A) securities that will be issued in the future. B) the volatility of interest rates. C) previously issued securities. D) government regulations specifying allowable rates of return.
In which of the following ways is a monopolistically competitive firm like a perfectly competitive firm?
A. Short-run economic profits are always positive. B. Short-run economic profits may be positive, negative, or zero. C. Long-run economic profits are negative. D. Long-run economic profits are positive.
Suppose there are only two goods (Good A and Good B) and the average person buys 4 of Good A in a year and 3 of Good B. If, in the base year, the Price of Good A is $5 and the Price of Good B is $10, and in the next year the Price of Goods A and B both increase by 5% at the same stores, But, Good A is much less likely to make you sick than it had been. What is the problem with the CPI way of calculating inflation that is apparent?
A. It understates the importance of Good B in the budget. B. It fails to recognize the quality increase in Good A therefore the CPI understates the degree of inflation. C. It understates the importance of Good A in the budget. D. It fails to recognize the quality increase in Good A and therefore the CPI overstates the degree of inflation.
If we observe that when the price of ice cream rises by 10%, ice cream manufacturers increase the quantity supplied of ice cream by 20%, then the price elasticity of supply is 2
a. True b. False Indicate whether the statement is true or false