The collapse of the subprime mortgage market increased the spread between Baa and default-free U.S. Treasury bonds. This is due to
A) a reduction in risk.
B) a reduction in maturity.
C) a flight to quality.
D) a flight to liquidity.
C
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The marginal product of capital is the increase in
A) capital needed to produce one more unit of output. B) output from a one-unit increase in capital. C) labor needed to accompany a one-unit increase in capital. D) output from a one-dollar increase in capital.
A fall in the price of milk, used in the production of ice cream, will:
A. Decrease the supply of ice cream B. Increase the supply of ice cream C. Cause a movement along the supply curve of ice cream D. Have no effect on the supply of ice cream
A cartel is likely to last longer if
A. market prices vary more over time. B. there are more firms in the industry. C. more new firms enter the market. D. the profits of participating members are relatively stable.
Because all workers should be able to earn a living wage, the minimum wage should be raised to $11.50 per hour in the United States. This statement is best described as
A. a normative statement. B. a marginal statement. C. an implication of an efficient market. D. a positive statement.