If a competitive market is at equilibrium, and if there is a sudden increase in demand, then a temporary
a. surplus will occur and the price will increase.
b. shortage will occur and the price will fall.
c. surplus will occur and the price will fall.
d. shortage will occur and the price will increase.
Ans: d. shortage will occur and the price will increase.
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Under perfectly competitive conditions, marginal revenue is
a. greater than average revenue. b. equal to average revenue. c. less than average revenue. d. equal to the average variable cost.
Suppose you purchase a call option to buy IBM common stock at $35 per share in September. The current price of IBM is 37 and the option premium is 4
What is the intrinsic value of the option? As the expiration date on the option approaches, what will happen to the size of the option premium?
GDP overstates our economic well-being
a. when household services are ignored b. when it fails to account for the underground economy c. when there are technological improvements d. when people litter e. when people moonlight
The primary function of taxes is to
A. Increase the purchasing power of the private sector. B. Increase private saving. C. Correct inequities in the distribution of goods and services. D. Transfer the command of resources from the private sector to the public sector.