Refer to Figure 12-8. Suppose the market price is $120. Which of the following is true?
A) The firm earns a profit equal to the area A. B) The firm suffers a loss equal to the area A.
C) The firm earns a profit equal to the area A + B. D) The firm will break even.
B
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Which of the following is not an advantage of starting a new business as a sole proprietorship?
A) the initial cost in setting up the business B) limited control over the operation of the business C) separation of ownership and business liability D) possibility of double taxation
The long-run aggregate supply curve represents the level of output possible if the economy:
A. has a zero inflation rate. B. has no structural unemployment. C. is operating at full capacity. D. is operating at an unemployment rate of zero.
A system in which depository institutions hold reserves that are less than the amount of total deposits is
A. a percentage reserve banking system. B. a fractional reserve banking system. C. a ratio reserve banking system. D. a legal reserve banking system.
This graph depicts a tax being imposed, causing demand to shift from D1 to D2. The amount of the tax imposed in the graph shown is equal to:
A. (P1 P3).
B. (P2 P1).
C. (P4 P2).
D. (P4 P3).