question

Which type of business is the most difficult to set up?

answer

Corporation

question

How do a sole proprietorship and a corporation differ?

answer

1. Corporations face more taxes than do proprietorships 2. Corporations can issue stocks and bonds, while proprietorships cannot 3. Proprietorships have unlimited liability while corporations have limited liability

question

Assume that you set up a sole proprietorship and your lawyer tells toy that as the owner, you could stand to lose your personal wealth if the business goes bankrupt. That means a sole proprietorship

answer

Faces unlimited liability

question

Who controls a sole proprietorship?

answer

The owner

question

A corporation is owned by its

answer

Stockholders

question

How does the owner of a sole proprietorship relate to the business?

answer

The owner and the business are not separate legal entities

question

In a typical year, ____ of new jobs are created by small firms.

answer

40%

question

85% of all firms employ __ workers.

answer

Fewer than 20

question

The owners of a ___ have a separate legal distinction from the business.

answer

Corporation

question

Limited liability

answer

The personal assets of the owners cannot be claimed If the business is bankrupt

question

How are corporate profits taxed in the United States?

answer

Earnings are taxed first as corporate profits then as personal income after dividends are paid

question

Which type of business earns the majority of it profits in the United States?

answer

Corporations

question

What controls a partnership?

answer

The owners

question

The interest payment on a bond is called

answer

The coupon payment

question

A tariff is tax posed by a government on

answer

Imports

question

Goods and services bought domestically but produced in other countries are referred to as

answer

Imports

question

Exports are domestically produced goods and services

answer

Sold to other countries

question

Absolute advantage is

answer

The ability to produce more of a good or service than competitors when using the same amount of goods and services

question

____ is the ability if an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors

answer

Comparative advantage

question

Under autarky, the dead weight loss is

answer

$0

question

Suppose the government allows imports of leather footwear into the united sates. What happens to the market price and what is the quantity of imports?

answer

Price falls to $18 Imports go up to 10

question

Under autarky, consumer surplus is represented by the area

answer

Above the equilibrium price and below the demand curve

question

A tariff is

answer

A tax imposed by a government in goods imported into a country

question

A numerical limit imposed by a governed on the quantity is a good that can be imported into the country is called a

answer

Quota

question

A tariff

answer

Makes domestic consumers worse off

question

Suppose the u.s. government imposes a $.40 per pound tariff in rice imports. The tax revenue collected by the government equals the area

answer

T/E. the government tariff revenue

question

Suppose the u.s. government imposes a $.40 per pound tariff in rice imports. The impact of the tariff is shown by

answer

K 42 million lbs

question

Suppose the u.s. government imposes a $.40 per pound tariff in rice imports. Without the tariff in place, the United States produces

answer

I 9 million lbs

question

Suppose the u.s. government imposes a $.40 per pound tariff in rice imports. With the tariff in place, the United States

answer

F-E 16 million lbs

question

Suppose the u.s. government imposes a $.40 per pound tariff in rice imports. As a result of the tariff, domestic producers increase their quantity supplied by

answer

E-I 6 million lbs

question

Suppose the u.s. government imposes a $.40 per pound tariff in rice imports. The increase in domestic producer surplus as a result is the tariff is equal to the area

answer

C

question

Suppose the u.s. government imposes a $.40 per pound tariff in rice imports. The tariff causes domestic consumption of rice

answer

Fall by 11 million

question

The main purpose of most tariffs and quotas is to

answer

Reduce the foreign competition that domestic firms face

Macroeconomics Ch 6-7 Dr. Z Online Review – Flashcards

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