ECON101 Lecture Notes - Lecture 10: Sole Proprietorship, Double Taxation, Demand Curve

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tantermite799

12 Feb 2020

School

University of Alberta

Department

Economics

Course

ECON101

Professor

Andrew Wong

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ECON101 Full Course Notes

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Application: the paradox of value: early economists, struggling with the problem of what determines the relative prices of products, encountered what they called the paradox of value. Many necessary products, such as water, have prices that are low compared to the prices of luxury products, such as diamonds. Water is necessary for our existence while diamonds are clearly not. Area underneath demand curve is the value to society for water. Sole proprietorship: business owned by a single person. Only taxed once, as profits are part of individual"s net income. Disadvantage: unlimited liability for the debts of the firm. The owner"s personal assets can be seized by the firm"s creditors: partnerships: business owned by two or more persons. Corporations: a corporation is a legal entity that may conduct business in its own name just as an individual does. Corporations are well positioned to raise large sums of money, shareholders enjoy limited liability.

Related Questions

Question 1: Answer the following MC questions...

a).

Samuel F.B. Morse patented the (5 points)

A.	telegraph
B.	automobile
C.	audio recorder
D.	radio transmitter

b).

Your friend wants to open a clothing shop. A necessary capital resource is a (5 points)

	A. place to open the shop
	B. knowledgeable fashion manager
	C. license to conduct business
	D.highway billboard for advertising

c).

Jessica is a violinist who believes she can extend her method of learning music to early childhood education. She opens a preschool in her hometown, using her expertise to form an arts-based program. What factor of production is this? (5 points)

	A. Capital
	B. Entrepreneurship
	C. Labor
	D. Land

d).

Your friend hopes to expand her business to multiple locations. It would be best for her to create a (5 points)

	A. limited liability company
	B. sole proprietorship
	C. corporation
	D. partnership

e).

Root and Vine is a gardening collective and local delivery service started by two friends. Their clientele has grown, and they want to expand. The owners like the idea of protecting their personal property, but they want to maintain control of the business. Which type of organization might best suit their growth? (5 points)

	A. Sole proprietorship
	B. Partnership
	C. Limited liability company
	D. Corporation

f).

An oligopoly is a market for a good or service that (5 points)

	A. has few competitive firms
	B. is perfectly competitive
	C. has one buyer
	D. has one seller

g).

The greatest goal in advertising is to convince us (5 points)

	A. "wants" are unnecessary
	B. the firm has the best price
	C. a particular product is a "need"
	D. the product is the same as other firm's products

h).

"Don't be like John, who had no health insurance when he needed emergency surgery. We make health insurance easy and affordable." This advertisement targets your (5 points)

	A. fears
	B. rituals
	C. emotions
	D. social values

i).

Why do monopolies and oligarchies benefit producers over consumers? (5 points)

	A. Companies control price through demand.
	B. Competition is driven by factors other than price.
	C. Demand influences production more when competition is less.
	D. Few producers can generally control prices.

ECON101 Lecture Notes - Lecture 10: Sole Proprietorship, Double Taxation, Demand Curve

ECON101 Full Course Notes

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