In what way are entrepreneurs residual claimants?
What will be an ideal response?
Entrepreneurs who start and run a business receive only whatever residual revenue remains after all the other factors of production (natural resources, labor, and capital) have been paid. They receive whatever accounting profit or loss the firm generates.
You might also like to view...
When a proposed merger between two companies is reviewed by the government, the relevant market is defined by
A) how elastic the demand is for each firm's product. B) how much advertising is done in the industry. C) whether or not there are close substitutes for the products of the two firms. D) counting the number of firms that produce the same product.
The comparative advantage of the South was in
(a) small farms producing for the local market. (b) plantation agriculture producing for export. (c) manufacturing. (d) shipbuilding and trades related to shipbuilding.
Suppose the star pitcher on a university's baseball team, who is now a sophomore, decides to finish college instead of joining a major league team. In doing this, he is giving up a $40,000 salary for each of the next two years. At an interest rate of 10 percent, the total value of this sacrifice is approximately
a. $46,000 b. $77,777 c. $69,420 d. $80,000 e. $88,000
In 2010, dissenters were worried that the effects of policies to reduce unemployment would create the conditions for
A. higher long-term inflation. B. a more horizontal Phillips curve. C. higher long-term unemployment. D. larger budget surpluses and, thus, higher interest rates.