Describe the three main categories of firms
What will be an ideal response?
The three main types of firms are sole proprietorships, where the firm is owned by a single person, partnerships, where the firm is owned by two or more persons, and corporations, where the firm is a legal form of business that provides owners with protection from losing more that their investment in the firm should the business fail.
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Which of the following would NOT be associated with the LATE PHASE of the product cycle?
A) Consumption in high income countries begins to exceed production. B) Increasing share of output is moving to developing countries where abundant low skilled and semi-skilled labor keep production costs low. C) Consumption continues to grow in low income countries. D) There is experimentation and improvement in design and manufacturing.
The income effect of a lower price for good A
a. invariably leads a consumer to buy more of good A, because the combination of unchanged money income and lower price raises that consumer's real income or purchasing power b. invariably leads a consumer to buy less of good A because the combination of unchanged money income and lower price encourages that consumer to buy more of other goods c. may lead to a larger, smaller, or even an unchanged quantity of good A demanded; it all depends on the nature of the good itself d. creates a change in the good's relative price and, therefore, causes the consumer to substitute good A in place of other goods e. causes a parallel outward shift of the budget line, enabling the consumer to buy more of all goods than before
Studies on consumer behavior have found that most people value fairness enough that they will refuse to participate in transactions they consider unfair, even if they are worse off as a result. How does this affect a firm's decision to raise prices in
the event of a temporary increase in demand? What will be an ideal response?
When the reserve requirement is increased, ________.
A. the excess reserves of member banks are increased B. a single commercial bank can no longer lend dollar-for-dollar with its excess reserves C. required reserves are changed into excess reserves D. the excess reserves of member banks are reduced