Other things the same, if prices fell when firms and workers were expecting them to rise, then
a. employment and production would rise.
b. employment would rise and production would fall.
c. employment would fall and production would rise.
d. employment and production would fall.
d
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Your bank has the following balance sheet Assets Liabilities Rate-sensitive $100 million Rate-sensitive $75 million Fixed-rate 100 million Fixed-rate 125 million What would happen to bank profits if the interest rates in the economy go down
? Is there anything that you could do to keep your bank from being so vulnerable to interest rate movements?
Suppose that for each firm in the competitive market for potatoes, long-run average cost is minimized at 20¢ per pound when 500 pounds are grown. If the long-run supply curve is horizontal, then
A) some firms will enjoy long-run profits because they operate at minimum average cost. B) the long-run price will be 20¢ per pound. C) each consumer will purchase $100 worth of potatoes. D) the long-run price will be set just above 20¢ per pound.
Graphically, the presence of an external cost that is ignored by producers can be shown as
A) a market supply curve to the left of the market supply curve for where the producers have to pay for the external cost. B) a market supply curve to the right of the market supply curve for which the producers have to pay for the external cost. C) a market supply curve the same as the market supply curve for which the producers have to pay for the external cost. D) the absence of a market supply curve.
Which of the following is NOT a correct description of opportunity cost of capital?
A) It is the normal rate of return on investment. B) It is normally included in accounting costs. C) It is the income sacrificed by not investing in another firm. D) It is an implicit cost.