Is the stock of a corporation with an excellent earnings record likely to be a better buy than the stock of a corporation doing very badly?
A) No, because the price of each stock will reflect differing situations.
B) Only if their different earnings records have persisted for several years.
C) Yes, because stocks with large dividend returns to owners are always good buys.
D) Yes, because the future is more likely to resemble the past than to differ from it in any systematic way.
A
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The alternative minimum tax (AMT) was created to
A. make sure that everyone had an equal chance of facing a tax audit. B. make sure that upper income taxpayers could not use deductions to avoid paying income taxes. C. make sure poor people paid at least something in taxes. D. make sure that everyone paid the same proportion of their income in taxes.
John takes 10 minutes to iron a shirt and 20 minutes to type a paper. Harry takes 10 minutes to iron a shirt and 30 minutes to type a paper. Which of the following statements is correct?
a. Harry has a comparative advantage in ironing. b. Harry has a comparative advantage in typing. c. Harry has an absolute advantage in typing. d. Harry has an absolute advantage in ironing. e. Neither can gain from specialization and exchange.
One indication that an industry might be oligopolistic is that prices change
a. infrequently. b. frequently. c. in rhythmic patterns. d. on a regular, periodic basis.
Recall the Application about the price competition between satellite and cable TV services to answer the following question(s).Recall the Application. In most cases where satellite TV service is introduced in an area with cable TV service, if the price of cable TV increases, then consumer surplus (in the cable TV market) usually:
A. increases. B. decreases. C. drops to zero. D. becomes negative.