Suppose Annie expects an annual return of $520 from an investment worth $500 . What should be the rate of interest charged by her to a risky borrower who is likely to repay the principal and interest with a probability of 0.7?
a. 45 percent
b. 48.6 percent
c. 20.33 percent
d. 53.4 percent
B
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Which of the following is an incorrect statement?
a. If for an activity MR>MC, then do more of it b. An incentive compensation scheme that increases MR will increase effort c. Fixed fees have no effect on effort d. Average cost is relevant to an extent decision
Consumer equilibrium occurs at:
a. any point of intersection between the budget line and an indifference curve. b. a point of tangency between the budget line and an indifference curve. c. the point where the slope of the indifference curve equals the ratio of the quantities. d. a point where the budget line cuts the curve from below.
The United States imports garments from third world countries. This means that if the U.S. economy were closed, the domestic price of goods would be ________ the world price of garments.
A. less than B. equal to C. greater than D. close to
Economists have suggested that the relatively higher unemployment in Europe has been caused by which of the following?
A) relatively high unemployment benefits B) relatively high level of worker protection C) inadequate macroeconomic policies D) increased labor costs E) all of the above