An investor owns bond #1 that has a rate of return of 10 percent, but a similar bond #2 has an 11 percent return and equal risk. By selling bond #1 and buying bond #2 to earn a higher return, the investor is engaging in:
A. Pooling
B. Arbitrage
C. Diversification
D. Time preference
B. Arbitrage
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Cost minimization suggests that two inputs should be employed to the point where
A) the marginal cost of each input is identical. B) the marginal revenue product of each input is identical. C) the marginal physical product per dollar spent on each input is identical. D) the extra contribution to physical output of the inputs is identical.
When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 62 units. The marginal revenue for the firm over this range is
a. $22. b. $27. c. $54. d. $108.
The IS curve shifts to the left where there is
A) a reduction in current taxes. B) an increase in expected future taxes. C) an increase in expected future output. D) all of the above E) none of the above
It can be argued that Thomas Malthus' An Essay on the Principle of Population statement that population growth will always outstrip food production has been discredited due to
A. an increase in the world-wide farming population. B. less world-wide food consumption. C. a reduction in resource scarcity. D. improvement in technology of food production.