Chapter_4_Key_Question_Solutions

Chapter_4_Key_Questi - 4-2(Key Question Assume that the five residents of Econoville receive incomes of $50 $75 $125 $250 and $500 Present the

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Unformatted text preview: 4-2(Key Question) Assume that the five residents of Econoville receive incomes of $50, $75, $125, $250, and $500. Present the resulting personal distribution of income as a graph similar to Figure 4.2. Compare the incomes of the lowest and highest fifth of the income receivers.The distribution of income is quite unequal. The highest 20 percent of the residents receive 10 times more income than the lowest 20 percent.4-4(Key Question) What are the three major legal forms of business organization? Which form is the most prevalent in terms of numbers? Why do you think that is so? Which form is dominant in terms of total profits? What major advantages of this form of business organization gave rise to its dominance? The three legal forms of business organizations are: sole proprietorship, partnership, and corporation.Proprietorships are the most prevalent. They are easy to start (relatively low cost), often don’t require a large customer base to be profitable, and provide maximum freedom for...
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This note was uploaded on 09/15/2008 for the course ECON 231 taught by Professor Victovio during the Spring '08 term at Drexel.

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Chapter_4_Key_Questi - 4-2(Key Question Assume that the five residents of Econoville receive incomes of $50 $75 $125 $250 and $500 Present the

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