You are the sole proprietor of a video rental shop. Sales have been climbing and customers are beginning to complain that they have a hard time finding copies of the really popular titles. You would like to address these complaints by buying more
videos, but unfortunately, you don't have any extra cash lying around to sink into the business. Your cousin Ned offers to put $30,00 . into the business, if you make him a partner. If you do, you will no longer have a sole proprietorship, but will have to change your firm to a partnership or a corporation. What should you consider when deciding how to reorganize your firm?
If you reorganize as a partnership, decision making will have to be shared with Ned. You will also be
completely liable for all debts incurred by the business, even if they were Ned's fault. If you reorganize as a
corporation, your liability will be limited by the amount of money you have invested in the corporation's
stocks. Unfortunately, your corporate income will be subject to both the income tax and the corporate
income tax.
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If the average productivity of American firms is rising more quickly than the average productivity of Indian firms, which of the following would you expect to see? (India's currency is the rupee.)
A) an increase in the value of the rupee relative to the dollar B) a decrease in the quantity demanded of Indian products relative to American products C) a decrease in the prices of Indian products D) an increase in the quantity demanded of Indian products relative to American products
In economics, "capital" refers to
a. money b. stocks, bonds, and other financial assets c. the seat of government d. machines, buildings, tools, and knowledge e. net worth (assets minus liabilities)
Risk-benefit analysis of chemicals is difficult because
a. there is a void in formal assessments of health and ecological risks b. perception of risk of chemical exposure is not always aligned with actual risk c. the estimation of social benefits is particularly daunting d. U.S. policy on toxic chemicals is not as well established as it is for policy on air and water quality e. all of the above
The figure below shows the market for shoes in a small importing country. Dd and Sd are the domestic demand and supply curves of shoes, respectively.
Following the imposition of a tariff, the domestic consumer surplus ________ by the area
A. decreases; d. B. increases; (b + d). C. decreases; (a + b + c +d). D. increases; (D0 - D1).