The owner of a sole proprietorship has
a. unlimited liability: if the firm goes bankrupt, the owner is liable for all debts.
b. unlimited liability: if the firm goes bankrupt, the owner is liable for the amount of the investment.
c. limited liability: if the firm goes bankrupt, the owner does not have to pay.
d. unlimited liability: if the firm goes bankrupt, the owner is liable for the amount of the fixed assets only.
a. unlimited liability: if the firm goes bankrupt, the owner is liable for all debts.
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Pluralistic ignorance exists when
A) the members of a group believe one thing but mistakenly assume that most of the other members believe something else. B) a group of bystanders all agree that something needs to be done but each feels less personal responsibility for taking action because each perceives that there are others who could take action. C) a majority of people in a group do not have the intellectual capacity of arriving at a viable solution to a public goods problem. D) the least-capable member of a group exerts his influence over the rest of the group when trying to arrive at a decision on how to internalize an externality.
If real money demand doubles while the nominal money supply is unchanged, what happens to the price level?
A) The price level increases by a factor of four. B) The price level doubles. C) The price level is unchanged. D) The price level falls by one-half.
Suppose milk and cereal are compliments and the demand for milk is Qdm = 40 - 6Pm - 2Pc, where Qdm stands for millions of gallons of milk demanded, Pm stands for the price of milk and Pc stands for the price of cereal. The supply of milk is Qsm = 6Pm - 8, where Qsm stands for millions of gallons of milk supplied. The demand and supply of cereal are Qdc = 90 - 5Pc - Pm and Qsc = 5Pc - 10, respectively, where Qdc stands for millions of boxes of cereal demanded and Qsc stands for millions of boxes of cereal supplied. Suppose the government imposes a $2.00 per gallon tax on milk. The supply function for milk becomes:
A. Qsm = 4Pm - 6. B. Qsm = 6Pm - 6. C. Qsm = 6Pm - 20. D. Qsm = 6Pm - 10.
All of the following are automatic stabilizers EXCEPT
A) the federal income tax system. B) welfare payments. C) discretionary tax cuts. D) unemployment compensation.