A market in which profit opportunities are eliminated almost instantaneously is
A. an efficient market.
B. a capitalist market.
C. a laissez-faire market.
D. a socialist market.
Answer: A
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Michelle Martelle, CEO of Michelle Enterprises, has five projects in hand and is considering which, if any, to undertake. Their expected returns are: project A = 12 percent, project B = 7 percent, project C = 10 percent, project D = 9 percent, and project E = 8 percent. If the interest rate is 8.5 percent, which, if any, investment projects will she accept?
a. Only project A. b. Projects A and C. c. Projects A, C and D. d. Projects A, C, D and E. e. Projects A, B, C, D and E.
An increase in the Marginal Propensity to Save will:
(a) Increase the size of the multiplier. (b) Increase the marginal propensity to consume. (c) Decrease the size of the multiplier. (d) Increase injections into the economy.
If the price of motel rooms increases by 10 percent while the prices of other goods and services increase by 5 percent on average, the relative price of motel rooms has:
A. decreased by 10 percent. B. increased. C. remained constant. D. decreased by 5 percent.
You can conclude from the above graph that
A. new firms will enter the industry.
B. existing firms will leave the industry.
C. the industry is in long run equilibrium.
D. it is unclear whether the industry is in the short run or the long run.