What is a stock? How do stocks affect the economy?
What will be an ideal response?
A stock represents a share of ownership of a corporation, or a claim on a firm's earnings/assets. Stocks are part of wealth, and changes in their value affect people's willingness to spend. Changes in stock prices affect a firm's ability to raise funds, and thus their investment.
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Always There Wireless is wireless monopolist in a rural area. There are 200 customers, each of whom has a monthly demand curve for wireless minutes of Qd = 200 - 100P, where P is the per-minute price in dollars and Q is the number of wireless minutes. The marginal cost of providing the wireless service is $0.25 per minute. If Always There charges $0.50 per minute, how many minutes will each customer buy each month?
A. 200 B. 150 C. 175 D. 250
Persistent negative current account balances will lead to ____
a. c and d b. d and e c. budget deficits d. appreciation of foreign currency e. depreciation of domestic currency
The wages of house painters will tend to rise when
a. more people recognize that house painters have very low incomes. b. the alternative earning opportunities of house painters improve. c. house painters can no longer find good paying alternatives for their labor. d. unemployment in the economy is high and there are few alternative jobs available for house painters.
The government can both set the efficient level of output in a market and maximize surplus by correcting for a negative externality by using:
A. a quota. B. a tradable allowance. C. a tariff. D. a subsidy.