The seller of a put option is transferring the risk:
A. this statement is incorrect since only sellers of call options are transferring risk.
B. of a price increase of the stock to the buyer of the option.
C. this statement is incorrect since options do not transfer risk.
D. of a price decrease of the stock to the buyer of the option.
Answer: B
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When benefit-cost analysis is used to facilitate U.S. public policy decisions,
a. the discount rate is selectedby the individual policy maker b. no adjustment can be made for inflation, since the inflation rate is not known in advance c. the discount rate used should reflect the social opportunity cost of funds d. only incremental costs are adjusted for time differences
Which of the following pairs of goods is likely to have a negative cross-price elasticity of demand?
A) pancakes and syrup B) orange juice and grapefruit juice C) peanuts and cat food D) hot dogs and hamburgers
According to real business cycle theory, real wages are _____ correlated with employment and the portion of the population that is not in the labor market _____ with higher real wages
a. positively; rises. b. negatively, does not change. c. negatively, rises. d. positively; falls. e. none of the above.
Define the following terms and explain their importance to the study of economics. a. marginal cost b. marginal revenue c. short-run equilibrium d. supply curve of the firm e. economic profit
What will be an ideal response?