In the employment of any resource, a firm should
A. hire each input unit that adds more to revenue than it adds to costs.
B. equate marginal revenue product with the cost of the additional resource.
C. hire until MRP equals MFC.
D. All of these are correct.
Answer: D
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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) You are each liable for organizing the business. B) Each of you could stand to lose your personal wealth if the business goes bankrupt. C) There is no legal responsibility of the business in case a customer sues, as the business is legally untouchable. D) None of these explain what unlimited liability means.