Answer the following statements true (T) or false (F)
1) The two most important investor preferences are a desire for high rates of return and a dislike
of inflation.
2) Arbitrage equates rates of return across assets of all risk levels.
3) Average expected rates of return and levels of risk are positively related.
4) Economic investment refers to the buying or selling of any asset in expectation of a financial
gain.
1) F
2) F
3) T
4) F
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Which of the following is NOT true about the equilibrium price?
A) the price where a change in quantity supplied occurs B) the price where the demand curve intersects the supply curve C) the price where quantity demanded equals quantity supplied D) the price where there is neither excess quantity demanded or excess quantity supplied
Figure 4-9
Moonshine" is illegal home brew made by adding sugar to accelerate corn fermentation. Ten pounds of sugar are necessary to make a gallon of moonshine. In the mid-1970s, the price of sugar tripled and the price of moonshine skyrocketed from $6 to $15 a gallon. Which graph in Figure 4-9 best illustrates this?
a.
1
b.
2
c.
3
d.
4
Briefly describe the three main social insurance programs (Social Security, Medicare, and unemployment insurance).
What will be an ideal response?
If a monopolist's marginal cost equals its marginal revenue
A. output should be raised. B. output should be reduced. C. production is at its most efficient level. D. profits are maximized or losses are minimized.