One major advantage of limited liability is that it:
A. is not subject to a free-rider problem.
B. is not subject to a principal-agent problem.
C. shields the personal assets of owners from liability claims.
D. has unlimited profit sharing among the firm's owners.
Answer: C
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
List four government expenditure programs designed to redistribute income
What will be an ideal response?
Suppose that a firm's long-run average total costs of producing custom wooden picnic tables is $300 when it produces 10,000 tables and $325 when it produces 11,000 tables. For this range of output, the firm is experiencing
a. economies of scale. b. constant returns to scale. c. diseconomies of scale. d. specialization.
Suppose you have been hired as a management consultant by a major oil company to help it optimally price gasoline at its service stations. Your client would like your team to perform a study on? customers' gasoline purchasing habits when they notice price increases. You suggest that the team? _____________.
A. collect competitor data. Your answer is not correct. B. develop a model that allows for scenario analysis. C. design and execute an experiment. D. utilize artificial intelligence to model human behavior.