If the physical plant for a corporation is considered to be a fixed input, then
a. it is held constant in the long run
b. it can be changed in the long run
c. labor must be a variable input
d. technology must be changing
e. the firm will lose money in the short run, except under perfect competition
B
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Jeremy is thinking of starting up a small business selling NASCAR memorabilia. He is considering setting up his business as a sole proprietorship. What is one advantage to Jeremy of setting up his business as a sole proprietorship?
A) As a sole proprietor, Jeremy would have the ability to share risk with shareholders. B) As a sole proprietor, Jeremy would have both ownership and control over the business. C) As a sole proprietor, Jeremy would face limited liability. D) All of the above would be advantages of setting up his business as a sole proprietorship.
An export industry is said to exhibit increasing returns to scale when
(a) a large-scale organization has significant competitive advantages over small-scale activities. (b) labor utilization increases by 50 percent but export output production increases by only 20 percent. (c) its small-scale business activity has significant comparative advantages over large-scale productions. (d) use of capital increases by 10 percent leads to an increase in export production by 10 percent.
In order for a voluntary agreement to be reached in general, transaction costs should be
A) infinite. B) high relative to expected marginal benefits of the agreement. C) low relative to expected marginal benefits of the agreement. D) determined by the Environmental Protection Agency.
What are the unintended consequences of raising minimum wage? Explain why these consequences would happen.
What will be an ideal response?