Suppose that a bond promises to pay its holder $100 a year forever. If the price of the bond increases from $1,000 to $1,250, then the interest rate on the bond
A) falls from 10 percent to 8 percent.
B) rises from 8 percent to 10 percent.
C) does not change because it is not affected by the price of the bond.
D) falls from 10 percent to 6 percent.
A
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A realistic production possibilities curve:
A. is concave while a simple PPF has constant opportunity costs. B. is straight lined while a simple PPFhas constant opportunity costs. C. is straight lined while a simple PPF is bowed outward. D. is concave while a simple PPFhas increasing opportunity costs.
Which of the following most accurately states the function of middlemen?
a. Middlemen reduce transaction costs. b. Middlemen add to the expense of buyers and sellers without providing any benefit. c. Our economy would work just as well without middlemen since they do not expand the availability of physical goods. d. Middlemen reduce the number of transactions since they increase the buyer's price and reduce the seller's net receipts.
The capital stock is fixed at 50 units, the price of capital is $30 per unit, and the price of labor is $25 per unit. 
Given the above, if the firm produces 20 units of output, what is average fixed cost?
A. $600 B. $150 C. $50 D. $1.50 E. none of the above
Sam, who is 55 years old and has been a steelworker for 30 years, is unemployed because the steel plant in his town closed and moved to Mexico. Sam is experiencing:
A) cyclical unemployment. B) permanent unemployment. C) frictional unemployment. D) structural unemployment.