What is a financial market? What are some of the types of financial markets?
Financial markets are marketplaces where savers and borrowers can exchange funds directly. The three main types are the bond market, stock market, and loanable funds market.
Bond Market: In a bond market, governments and corporations can borrow money directly from savers.
Stock market: A stock market is a place where companies might be able to generate funding for expansion. This kind of financing is known as equity financing because people who buy the stock that a company is selling are buying equity—or ownership—in that company.
Loanable funds market: In a loanable funds market, money is available for borrowing by households, businesses, and governments. Loanable funds come from both private sector saving and public saving.
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Which statement best illustrates the concept of diminishing marginal utility?
A. Some consumers will receive less satisfaction from consuming pizza than from consuming hamburgers. B. As one consumes more slices of pizza for lunch, one would be willing to pay a higher price for additional slices. C. A typical consumer will receive less satisfaction from consuming the third slice of pizza for lunch than from the second slice. D. A decrease in the price of slices of pizza will cause consumers to buy more slices for lunch, because they can afford to buy more.
In the above figure, if the market quantity is restricted to 500,000 and the price is allowed to rise to set the quantity demanded equal to the quantity supplied, then the producer surplus is equal to
A) area D + area F. B) area C + area E. C) area A + area B + area C. D) area A + area B. E) area B + area D + area F.
The demand for most farm products is relatively inelastic. All else constant, what is the effect on farm revenues as a result of the introduction of new and better farm equipment which increases productivity?
A) Farm revenues could increase or decrease depending on the cost of this new equipment. B) Farm revenues remain constant because consumers will not increase their consumption of farm products by much. C) Farm revenues increase. D) Farm revenues decrease.
Refer to Figure 17-3. Panel D is appropriate when used to represent
A) the quantity of labor demanded by an input price taker. B) the quantity of labor supplied by someone working a fixed number of hours. C) the labor supply curve facing an input price taker. D) the highly-skilled labor market supply curve.