Which of the following is not an advantage of starting a new business as a sole proprietorship?
A) separation of ownership and business liability
B) limited control over the operation of the business
C) the initial cost in setting up the business
D) possibility of double taxation
Answer: A
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Answer the following statement(s) true (T) or false (F)
1. Contestable market conditions will cause a natural monopoly to produce the competitive quantity. 2. In a contestable market with room for many firms, industry output will be the same as in a successful cartel. 3. The Cournot oligopoly model is based on the assumption that firms treat their rivals' output as fixed and given. 4. Firms' total output is higher in the Cournot oligopoly model than in the Bertrand oligopoly model. 5. In both competition and monopolistic competition, free entry and exit guarantee that the industry's output is produced at the least possible cost.
Which of the following will most likely have the greatest effect on an individual's consumption function?
a. winning a small amount in the lottery b. a one-time tuition grant c. a week of high overtime pay d. an inheritance paying a modest annual dividend
If the government of a country wants to increase the supply of loanable funds, it should: a. charge a higher rate of tax on the income that is saved
b. charge a lower rate of tax on the income that is saved. c. charge a higher rate of tax on the income that is invested. d. charge a lower rate of tax on the income that is consumed.
Before entry into an industry, a profit-maximizing decision maker will compare the expected market price with the expected
a. long-run average total cost. b. short-run marginal cost. c. long-run average variable cost. d. short-run average total cost.