Suppose that the price of cornflakes is $3 per box and the price of oatmeal is $4.50 per box. Both boxes contain the same number of ounces of cereal. The relative price of cornflakes in terms of oatmeal is
A) 0.67.
B) 1.0.
C) 0.75.
D) 1.50.
A
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Suppose you purchased 100 shares of stock in 2010 for $25 a share and you sell them today for $50 a share. If the capital gains tax is 28 percent, your tax liability is
A) $70. B) $700. C) $2500. D) indeterminate without knowing the inflation rate.
In a perfectly competitive industry, an individual firm faces
A) a perfectly inelastic labor supply curve. B) a perfectly vertical labor supply curve. C) a perfectly elastic labor supply curve. D) none of the above.
The main advantage of diversification as an investment policy is that it-
What will be an ideal response?
Which of the following statements is true?
A. The effectiveness of a board of directors in monitoring managers is enhanced by appointing members from the firm who are well-informed about the management problems facing the firm. B. Shareholders as a group have little or no ability to force managers to pursue maximization of the firm's value. C. Reducing the amount of debt financing can reduce divergence between the shareholders' interests and the manager's interests. D. Equity ownership by managers is thought to be one of the most effective corporate control mechanisms. E. All of the above are true.