Subprime mortgages
A) are loans covered by reserve requirements of commercial banks.
B) are home loans backed by the Treasury.
C) are home loans given to individuals without credit to meet the loan requirements.
D) none of these choices.
C
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Jeremy is thinking of starting up a small business selling NASCAR memorabilia. He is considering setting up his business as a sole proprietorship. What is one disadvantage to Jeremy of setting up his business as a sole proprietorship?
A) As a sole proprietor, Jeremy would face unlimited liability. B) As a sole proprietor, Jeremy would be subject to significant rules and regulations. C) As a sole proprietor, Jeremy would be taxed twice. D) As a sole proprietor, Jeremy would not have control of the business.
Show, using utility theory, why a consumer who is initially maximizing her utility will alter her consumption pattern in response to a change in the price of a good.
What will be an ideal response?