The main advantage of a corporate form of organization is that
A) shareholders have limited liability.
B) shareholders have unlimited liability.
C) shareholders are not subject to double taxation.
D) all corporate profits must be distributed as dividends.
Answer: A
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The first fundamental theorem of welfare economics states that
A) under certain conditions, a competitive equilibrium is Pareto optimal. B) a competitive equilibrium is always Pareto optimal. C) under certain conditions, a Pareto optimum is a competitive equilibrium. D) a Pareto optimum is always a competitive equilibrium.
If all producers in a market are cartel members, then the demand curve facing the cartel is
A) the market demand curve. B) horizontal. C) identical to the demand curve in the dominant firm model. D) identical to the monopolist's demand curve.