Suppose prices for new homes have risen, yet sales of new homes have also risen. We can conclude that:
A. the demand for new homes has risen.
B. the law of demand has been violated.
C. new firms have entered the construction industry.
D. construction firms must be facing higher costs.
Answer: A
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A nation's net exports consist of
A) its exports plus its imports. B) its exports plus all other nation's imports. C) its exports minus its imports. D) its imports plus all other nation's exports.
Which of the following statements about rent seeking is false?
A) A person is engaging in rent-seeking behavior when he uses the political process to acquire ownership of a resource that belongs to the public. B) If a firm can benefit from government intervention in the economy, it is more likely to spend resources attempting to secure this intervention than toward innovating its product to gain a competitive edge in the market. C) Because rent seeking redistributes society's resources, anyone engaging in such behavior is violating the law. D) Rent seeking often involves governments because governments transfer huge amounts of funds that economic agents must compete for.
Reinvestment makes up about ______ of a typical firm’s funding.
a. 1/4 b. 1/2 c. 2/3 d. 3/4
Which of the following is an advantage of starting a new business as a sole proprietorship?
A) double taxation B) ease in setting up C) limited liability D) greater ability to raise funds