According to efficient market theory, which of the following can best predict the stock price of a particular company tomorrow?
A. a finance professor who knows a lot of investment theory
B. that company's employee who has inside information about the company
C. a stock trader who has traded stocks for more than 10 years
D. none of these: Everyone has an equal chance of predicting future stock prices.
Answer: B
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A production possibilities curve shows the combinations of products which can be produced in an economy which is fully employing and efficiently using its productive resources
Indicate whether the statement is true or false
If economies of scale are relatively important in an industry, the typical firm's
A) long-run average cost curve will reach a minimum at a level of output that leaves room for a large number of firms to enter the industry. B) long-run average cost curve will begin rising before it reaches minimum efficient scale. C) long-run average cost curve will reach a minimum at a level of output that is a relatively large fraction of total industry sales. D) marginal cost curve will decline continuously until it reaches minimum efficient scale.
Which of the following relationships implies that a firm's short-run cost function is linear?
A) MC = AC B) MC = AVC C) AC = AFC + AVC D) MC > AC
A consumption-based theory of the determination of the real interest rate is based on the assumption that: a. a rise in the real interest rate will increase current consumption
b. the real interest rate must adjust to make people willing to experience changing consumption levels over time. c. the real interest rate is determined by the supply and demand for investment and is therefore unaffected by consumption decisions. d. the real interest rate must be positive.