Hundreds of speculators conclude in May that the coming summer's corn crop will be much lower and that the November corn price will be consequently much higher than most people expect
When they act on their beliefs in the futures market, they would strive to ________ corn futures, which would tend to ________ the price of corn futures. A) sell; reduce
B) sell; raise
C) buy, reduce
D) buy; raise
D
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A natural monopoly regulated with an average cost pricing rule is ________
A) efficient and incurs an economic loss B) inefficient and makes zero economic profit C) inefficient and makes an economic profit D) efficient and makes zero economic profit
Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If hiring another worker would increase output by three units per hour, then to maximize profits the firm should
A) not hire an additional worker. B) not change the number of workers it currently hires. C) hire another worker. D) There is not enough information to answer the question.
In the base year the price index
A) will be between 1 and 100. B) will always equal 100. C) equals 100 times the cost of the market basket in the base year. D) will equal the year.
One reason why purchasing power parity may not work perfectly is that some goods, because of their nature, are difficult to trade
a. True b. False