An advantage of owning stock in a corporation as opposed to being a bondholder is that
a. stocks carry a guaranteed dividend
b. stock dividends are paid out of corporate profits before the bondholders are paid
c. stockholders' dividends are linked to the size of the corporation's profits
d. bonds carry more risk
e. bond payments are not guaranteed by the government
C
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The return to the entrepreneur for organizing, producing, and risk-taking in the operation of the business is
a. rent. b. equal to total revenue. c. equal to total cost. d. total profit.
An author who writes newspaper columns for $75 each is deciding whether to purchase a personal computer with a laser printer. She figures she'd be able to write two more columns per month than she could on her typewriter. She should
a. buy the computer if the monthly payment is less than $300 b. buy the computer regardless of its price c. not buy the computer if the monthly payment is greater than $75 d. not buy the computer regardless of the price e. buy the computer if the monthly payment is less than $150
A zero inflation rate is not the Fed's objective because
a. that would cause prices to rise b. that would cause price to fall c. it knows that it cannot attain a zero rate d. it believes that the true rate of inflation is lower than what is measured by the Consumer Price Index (CPI) e. high rates of inflation may help labor markets adjust more easily
The United States has an absolute advantage in producing T-shirts, but not a comparative advantage, because
A. Another country may have an absolute advantage in producing T-shirts. B. The United States uses fewer resources to produce T-shirts than another country can C. Labor costs in the production of T-shirts are lower in the United States than in other countries. D. Other countries, such as China, can produce T-shirts at a lower opportunity cost relative to the United States.