Assume you and your cousin Vinny set up a partnership and your lawyer tells you that as the owners you will each face unlimited liability. What does that mean?
A) There is no legal responsibility of the business in case a customer sues, as the business is legally untouchable.
B) Each of you could stand to lose your personal wealth if the business goes bankrupt.
C) You are each liable for organizing the business.
D) None of these explain what unlimited liability means.
B
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A voluntary exchange of products means that
a. if one nation gains from a swap, the other nation must necessarily lose. b. each country must do its best to act to the disadvantage of its trading partners. c. both parties must gain (or expect to gain) from the transaction. d. both parties must lose owing to the transaction costs involved.
A monopolist may make a profit
A. only in the short run. B. only in the long run. C. in both the short and long run. D. in neither the short nor long run.
________ is called an implicit cost, while ________ is called an explicit cost
A) An accounting cost; an economic cost B) A nonmonetary opportunity cost; a cost that involves spending money C) A production cost; a sales cost D) An actual cost; a hypothetical cost
Suppose that the United States and Spain both produce cognac and handbags. In the United States, cognac sells for $20 a bottle and handbags sell for $80. In Spain, cognac sells for 30 euros a bottle and handbags sell for 40 euros. Given this information, trade will flow in both directions if the price of a dollar is between
A. 0.67 and 2.0 euros. B. 1.5 and 2.5 euros. C. 0.5 and 0.75 euro. D. 2.0 and 3.0 euros.