Everything else held constant, if the expected return on RST stock declines from 12 to 9 percent and the expected return on XYZ stock declines from 8 to 7 percent, then the expected return of holding RST stock ________ relative to XYZ stock and
demand for XYZ stock ________. A) rises; rises
B) rises; falls
C) falls; rises
D) falls; falls
C
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Mike, of Mike's Machines has hired a consultant who informs Mike that since the total revenue from current operations exceeds total cost, he should consider increasing production of machines. Mike would be best off if he
a. increases production of machines until total revenue is equal to total cost. b. increases production until net gains are equal to zero. c. maintains his current level of production so long as marginal revenue is equal to marginal cost. d. decreases his current level of production if marginal revenue is equal to marginal cost.
If low-quality workers are unable to obtain a college degree, then a separating equilibrium can occur if
A) the cost of obtaining a degree is less than the wage premium paid to those who have obtained the degree. B) the cost of obtaining a degree is greater than the wage premium paid to those who have obtained the degree. C) the cost of obtaining a degree is zero. D) the wage premium paid to those who have obtained the degree is positive.
Consider the following game. You pick a card from a 52-card deck and each time you select a queen, you get $520. For all other cards pay $26. The expected value of the game is
A. -$24. B. $0. C. $16. D. $64.
Assume that prices and wages adjust rapidly so that the markets for labor, goods, and assets are always in equilibrium. What are the effects of each of the following on output, the expected real interest rate, and the current price level?(a)a temporary increase in taxes(b)a reduction in the effective tax rate on capital(c)an increase in expected inflation
What will be an ideal response?