As the price of a good rises:
A. firms generally decrease the supply of the good.
B. government regulation becomes more justified.
C. more firms can cover their opportunity cost of producing the good.
D. firms generally increase the supply of the good.
Answer: C
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An important feature of representative democracy is the incentive and political power it offers participants to employ legislation to increase their wealth, either through direct transfers or through favorable public expenditures and regulations. Such benefits are called ________ , and the activity that interest groups undertake to elicit these special favors is called ________
a. taxes; tax-seeking b. dividends; portfolio management c. rents; rent-seeking d. interest; investment
Relative-price variability
a. rises with inflation, leading to an improved allocation of resources. b. rises with inflation, leading to a misallocation of resources. c. falls with inflation, leading to an improved allocation of resources. d. falls with inflation, leading to a misallocation of resources.
Characteristics of monopolistic competition include all of the following except
A. significant barriers to entry. B. a relatively large number of sellers and buyers. C. small market share for each seller. D. differentiated products.
Tim has a toenail clipping business that is a sole proprietorship. If he is sued for a botched pedicure
A) he has limited liability. B) he has separation of ownership and control. C) all of his personal assets are at risk. D) he will be taxed doubly.