Which of the following is not an advantage of the corporate structure over proprietorship and partnership forms of business organization?
a. Stockholders in the corporation have limited liability, whereas proprietors or partners have unlimited liability.
b. Ownership rights of a corporation may be transferred more easily.
c. Large investment funds are more easily attracted by the corporation.
d. Corporations are less likely to suffer from the principal-agent problem.
D
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Capital is a factor of production. Which of the following is an example of capital?
i. $1,000 in money ii. 100 shares of Microsoft stock iii. $10,000 in bonds issued by General Motors iv. a drill press in your local machine shop A) i and ii B) ii only C) iii only D) iv only E) ii and iii
The absolute price elasticity of demand for a product that has many good substitutes is probably
A) less than 1. B) greater than 1. C) equal to 1. D) infinity.