Limited liability exists when
A) the liability of owners is limited to the value of the shares in the firm they own.
B) the liability of owners is limited to the share of the debt they personally took on.
C) partners specialize and each partner is responsible for the debts of his or her specialized area.
D) bondholders must receive their payments before stockholders can earn any money.
A
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The Troubled Asset Relief Program (or TARP) was introduced in order to:
A. reduce asset prices. B. reduce the government budget deficit. C. generate additional tax revenue. D. prevent the collapse of large financial institutions.
If the price level last year was 220 and this year is 250, what is the inflation rate between the two years?
A) 30 percent B) 13.6 percent C) 12.2 percent D) 20 percent
Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed in the table. CustomerReservation Price($/Rental)A22B16C12D8E6F4Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island Bikes charges a different price in the morning and in the afternoon, then what will be the total economic surplus?
A. $9 B. $3 C. $41 D. $49
If price decreases by 10 percent and quantity demanded increases by 2 percent, the price elasticity of demand will be
A. 5. B. 20. C. 2. D. 0.2.