A decrease in default risk on corporate bonds ________ the demand for these bonds, and ________ the demand for default-free bonds, everything else held constant
A) increases; lowers
B) lowers; increases
C) does not change; greatly increases
D) moderately lowers; does not change
A
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Explain how the invisible hand delivers an efficient market outcome
What will be an ideal response?
Carefully explain if the following statements are true, false, or uncertain
a. If average cost is increasing, marginal cost must be increasing. b. If there are diminishing returns, the marginal cost curve must be positively sloped. c. Marginal costs decrease as output increases because the firm can spread fixed costs over more units.
Incomes of U.S. households in the 1970s and 1980s
a. grew rapidly, due to the widespread success of labor unions in pushing up wages during those decades. b. grew rapidly, due to several increases in the minimum wage during those decades. c. grew rapidly, due to government policies that discouraged the importation of foreign products during those decades. d. grew slowly, due to slow growth of the output of goods and services per hour of U.S. workers' time during those decades.
Refer to the above graph for a profit-maximizing monopolist. The firm will set its price at:
