Which of the following is correct. Select one answer for each.

1. An opportunity cost that a business might face is

a. forgoing the interest that the owners could have earned on their savings if they had not invested their savings in the business

b. forgoing rental income to be earned if the business rented out its building

c. forgoing the salaries the owners would have received at other jobs

d. all of the above

2. The function of price in a market system

a. is a way of adjusting the balance between the forces of supply and demand

b. acts as an incentive to producers to either increase or decrease the quantity supplied c. is a means of rationing the available supply among those who demand it

d. all of these

3. The law of demand predicts that

a. the more consumers purchase a good, the greater the demand for the good

b. consumers are willing to buy more of a good at a lower price than at a higher price

c. as prices go up, the quantity of a particular good that consumers will buy also rises

d. consumers are willing to buy more of a good at a higher price than at a lower price

4. A key advantage of the corporate form of business organization is

a. that the business lives on even if the owners of the business die

b. limited liability of stockholders

c. the ability to raise significant amounts of financial capital

d. all of these