The life insurance industry is an example of an industry with imperfect information.
Answer the following statement true (T) or false (F)
True
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When the foreign exchange value of the Mexican peso is above its equilibrium rate, the peso will:
a. tend to be revalued. b. tend to increase in value over other currencies. c. be high demand in the foreign exchange market. d. tend to depreciate. e. tend to appreciate.
The pizza delivery industry is monopolistically competitive. Little Joe's Pizzeria raises its prices by 10%, but all the other pizzerias in town keep their prices the same. Which of the following is most likely to occur?
A. Little Joe's Pizzeria's profits will increase. B. The number of customers served by Little Joe's Pizzeria will increase. C. Little Joe's Pizzeria will not be able to sell any pizzas, because it was the only firm to raise its price. D. Little Joe's Pizzeria will lose some of its customers.
Answer the following statements true (T) or false (F)
1. The break-even point on a break-even chart is equivalent to the point where MR = MC on a cost/output graph. 2. It may be beneficial for a firm that is suffering a loss to continue to operate in the short run as long as it is recovering its fixed cost. 3. Any revenue over and above total cost is labeled economic profit. 4. Wages paid are an example of an explicit cost of doing business. 5. Marginal cost is equal to the increase in total cost per unit of input divided by marginal product. 6. Under perfectly competitive conditions, marginal revenue is equal to the price at which a good is sold. 7. Average total cost is equal to total cost divided by marginal product. 8. Normal profit is considered an opportunity cost of operating a business.
Investment in a broad portfolio of stocks is most attractive for
a. short-term investors. b. long-term investors. c. investors seeking a steady rate of return. d. investors who will need the funds for other purposes in about 10 years.