Compared to a proprietorship, a disadvantage of a partnership is
A. that potential liability to each partner is greater.
B. that profits are taxed twice.
C. unlimited liability.
D. that it is harder to keep the firm going after the death of an owner.
Answer: A
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In a principal-agent problem, if the contract used leads to the maximum of the principal's and agent's combined value (profits, payoffs), we can say that this contract features
A) inefficiency in production, since only the principal's profits should be maximized. B) inefficiency in production, since only the agent's payoffs should be maximized. C) efficiency in production. D) inefficiency in production, since the agent's payoffs should be maximized and the principal's profits should be minimized.
The range to the right of the midpoint on a linear demand curve is
A) elastic. B) infinite. C) one. D) inelastic.
When a profit-maximizing competitive firm finds itself minimizing losses because it is unable to earn a positive profit, this task is accomplished by producing the quantity at which price is equal to
a. sunk cost. b. average fixed cost. c. average variable cost. d. marginal cost.
Which of the following offers an explanation for the Leontief paradox?
I. Leontief's assumption that U.S. and foreign technologies are the same is incorrect. II. Leontief did not incorporate land and other resources. III. Leontief did not distinguish between skilled and unskilled labor. a. I, II, and III b. I and II c. I and III d. I