How does the owner of a sole proprietorship relate to the business?
A) The owner and the business are separate legal entities.
B) The owner and the business are not separate legal entities.
C) The assets of the owner are considered separate from the assets of the business.
D) None of these describe the legal relationship of the owner to the business.
Answer: B
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Country A specializes in the production of automobiles and 45% of its population works in the automobile manufacturing industry. A sharp increase in world prices for automobiles led to a boom in the automobile manufacturing industry in Country A
However, the automobile manufacturers overestimated the demand for automobiles. This led to overproduction which resulted in a large stock of unsold cars. Which of the following is likely to happen in the near future? A) Investment in Country A will increase. B) The supply of credit in Country A will increase. C) Household consumption in Country A will increase. D) The unemployment rate in Country A will increase.
Bobby drives her car to work; Bill takes the bus. They are both behaving efficiently as long as we assume
A) it costs the same for Bobby to drive the car as it does for Bill to take the bus. B) both Bobby and Bill value their trips equally. C) Bobby and Bill are traveling to different locations. D) both Bobby and Bill voluntarily selected the forms of transportation they take to work.
Vertical contracts between manufacturers and retailers often aim to
a. Incentivize the manufacturers to undertake costly activities, which they otherwise may not realize the full benefits of on their own b. Reward the manufacturers for undertaking the risk inherent in introducing a new product c. Serve as a "signal" of the manufacturer's belief of the likely success of his product d. All of the above
If the government regulates the price a natural monopolist can charge to be equal to the firm's average total cost, the firm has no incentive to reduce costs
a. True b. False Indicate whether the statement is true or false