The difference between the risk-free rate and the interest rate a particular investor has to pay is called the:
A. credit spread.
B. risk premium.
C. Both of these are true.
D. Neither of these is true.
C. Both of these are true.
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In a perfectly competitive market, a firm in long-run equilibrium will be operating
A) to the right of the minimum of the long-run average cost curve. B) to the left of the minimum of the long-run average cost curve. C) at the minimum of the long-run average cost curve. D) at the minimum of the marginal cost curve.
When price exceeds average variable cost in the short run, a competitive firm's marginal cost curve is regarded as its supply curve because
a. the position of the marginal cost curve determines the price for which the firm should sell its product. b. among the various cost curves, the marginal cost curve is the only one that slopes upward. c. the marginal cost curve determines the quantity of output the firm is willing to supply at any price. d. the firm is aware that marginal revenue must exceed marginal cost in order for profit to be maximized.
The figure below shows the supply and demand curves for jeans in Smallville.
At the price of $60 per pair, sellers offer ________ pairs of jeans per day, and buyers wish to purchase ________ pairs of jeans a day.
A. 24; 8 B. 8; 24 C. 16; 16 D. 60; 20
All other factors held constant, when McDonald's raises the price of its Big Mac by 20 cents,
A. there is likely to be an increase in demand for Taco Bell's Chalupas, assuming the Big Mac and Chalupas are substitutes. B. there is likely to be an increase in demand for McDonald's Big Mac, assuming the Big Mac and Chalupas are substitutes. C. there is likely to be a decrease in demand for Taco Bell's Chalupas, assuming the Big Mac and Chalupas are substitutes. D. there is likely to be a decrease in the quantity of Taco Bell's Chalupas demanded, assuming the Big Mac and Chalupas are substitutes.