________ occurs when market participants observe returns on a security that are larger than what is justified by the characteristics of that security and take action to quickly eliminate the unexploited profit opportunity
A) Arbitrage
B) Mediation
C) Asset capitalization
D) Market intercession
A
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A competitive employer will hire inputs up to the point where the
A. price of the input equals the marginal product of the input. B. price of the input equals the price of the output. C. price of the input equals the marginal revenue product of the input. D. marginal product of the input reaches a maximum.
Suppose that the opportunity cost of a student's time is greater when he studies than when he works. What mistake is he making and why?
What will be an ideal response?
Which of the following are true?
a. Negative externalities are real costs, but, unlike the other resources a firm uses in production, no one owns the air, so a firm does not have to pay for its use. b. In the case of external costs, firms tend to produce too much from society's standpoint, causing an efficiency loss due to an overallocation of scarce resources to the production of the good. c. If government could impose a pollution tax equal to the exact size of the external costs imposed by a firm, then the firm would produce at the socially desired level of output. d. All of the above are true.
Explain why on average the profit levels for invention and entrepreneurship are generally so low.
What will be an ideal response?