Suppose an efficient market has been operating with regard to stock in a particular company, and that company announces that its profits were up 50% from the previous period. However, the stock price was unchanged after getting the news on a day when all of the other stocks are barely moving. This is
A. absolutely illogical.
B. at least potentially consistent with the efficient market hypothesis because investors may have been anticipating a 25% gains.
C. at least potentially consistent with the efficient market hypothesis because investors may have been anticipating a 75% gains.
D. at least potentially consistent with the efficient market hypothesis because investors may have been anticipating those 50% gains.
Answer: D
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A) if the aggregate supply increases equals the aggregate demand increase B) if aggregate supply decreases more than aggregate demand increases C) if aggregate supply increases more than aggregate demand increases D) if aggregate supply decreases less than aggregate demand decreases E) if aggregate supply decreases more than aggregate demand decreases
When firms do not collude in a game-playing market environment, firms end up with low prices and high output levels
Indicate whether the statement is true or false
Compared to a negative income tax, the federal personal income tax is thought of as a way to promote greater equality. Why?
If the more-is-better principle holds, two different consumption bundles can't be equally attractive unless:
A. they contain the same amounts of each good. B. the consumer is unable to rank both bundles. C. as the consumer gives up some of one good, the consumer is given more of the other good. D. they each cost the same amount to purchase.