If firms are required to pay the social costs of a negative externality, they would produce more of the good causing the externality
a. True
b. False
Indicate whether the statement is true or false
False
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Cleaning an environment may lead to
a. less production. b. higher prices. c. lower incomes. d. all of the above.
Identify the advantage of the corporation over sole proprietorship and partnership?
a. Small stockholders in a corporation have the ability to influence corporate policy because corporations are governed on the "one person, one vote" principle. b. Corporate income usually receives tax exemptions from the government. c. Corporations that violate environmental or workplace safety law cannot be punished. d. Corporation can survive even if ownership changes hands.
If you want to earn a high income you should figure out what others value because
What will be an ideal response?
A firm invests in a new machine that costs $5,000 a year but is expected to produce an increase in total revenue of $5,200 a year. The current real rate of interest is 7%. The firm should
A. undertake the investment, because the expected rate of return of 10% is greater than the real rate of interest. B. not undertake the investment, because the expected rate of return of 4% is less than the real rate of interest. C. not undertake the investment, because the expected rate of return of 6% is less than the real rate of interest. D. undertake the investment, because the expected rate of return of 8% is greater than the real rate of interest.