John, Samuel, and Jim Are General Partners in the Development

question 15

Multiple Choice

John, Samuel, and Jim are general partners in the development of an electric car. Jim pours all his money into the project, but it never seems to work out. Eventually the partnership and Jim cannot meet their daily obligations, and the partnership is dissolved. Jim files for bankruptcy. If the partnership assets are insufficient to pay all claims against the partnership:

• A) the trustee in bankruptcy must seek recovery of the deficiency first from John and Samuel.
• B) Jim is released from liability because of the bankruptcy proceedings.
• C) Jim's personal assets are not available for the partnership debts because he has limited liability.
• D) the bankruptcy court must follow the doctrine of marshaling of assets.

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Definitions:

Resource Price

The cost associated with acquiring a resource needed for production, such as labor, materials, or capital.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a factor, such as labor or capital.

Marginal Revenue Product

The extra income produced by using an additional unit of a resource or input in the production process.

Wage Rate

The fixed amount of compensation or payment a worker receives from an employer in exchange for labor, typically measured per hour or piece of work done.