Question

16. When demand decreases in a competitive market,

a. Supply rises.

b. Actual price rises.

c. Quantities sold increase.

d. Equilibrium price falls.

e. Shortages emerge.

20. The easiest and most inexpensive form of business organization to establish is a

a. Corporation.

b. Partnership.

c. Firm.

d. Proprietorship.

e. Foundation.

22. An important distinction between corporate and unincorporated businesses is that

a. Corporations are able to borrow money; unincorporated businesses must be finance from internal sources.

b. Corporation owners have unlimited liability; unincorporated businesses are limited in their liability.

c. Income earned by corporations may be subject to double taxation; income of unincorporated businesses is taxed only once.

d. Corporations have a limited life; unincorporated businesses have an unlimited life.

e. It is impossible for the income of unincorporated businesses to be taxed at a higher rate than the income of corporations.

23. In free markets, the price system encourages producers to meet consumers’ wants because

a. It signals producers as to which goods are profitable.

b. Consumers are generally willing to pay more than the actual price.

c. It rewards consumers for the resources they bring to the marketplace.

d. It allows the government to direct firms to the best production technique.

e. Producers have the public interest in mind.

30. In addition to preferences, a consumer’s choice is further constrained by

a. Nothing.

b. A rising marginal utility curve.

c. An equilibrium market where utility is minimized.

d. Income and commodity prices.

e. The fact the optimal market basket is rarely in the equilibrium market basket.

Answer 1

Answer 16: Option D is correct. Equilibrium price has been falls when the quantity demanded has been decreases as less demand has been preferred by the individual.

Answer 20: Option D is correct. Sole propertioship is the easiest , cheapest and simplest form of business organization I an economic well being.

Answer 22: Option A is correct. Corporate business can borrow money from external sources such as bank as well as financial institutions where as unincorporated business has taken money from there internal sources itself.

Answer 23: Option Bis correct. When the producer are able to meet the need of the consumer which resulted in an higher production and better profit for the producer. As consumer are willing to pay higher price.

Answer 30: Option D is correct.As consumer constraint other than preference are income and price of the commodity. It means that income earned by the consumer and price of the product in the market place.