The relationship between the value and the price of a stock suggests that
A. the equilibrium price of a stock strikes a balance between those who think the stock is worth more and those who think the stock it's worth less at the current price.
B. it is the stock market's best guess regarding the expected value of the company's future profits.
C. stocks are overvalued.
D. both A and B are true.
Ans: D. both A and B are true.
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The efficiency wage theory argues that:
a. employers will try to keep wages from falling when the economy is weak or the business is having trouble, and employees will not expect huge salary increases when the economy or the business is strong. b. the productivity of workers will increase if they are paid more, and so employers will often find it worthwhile to pay their employees somewhat more than market conditions might dictate. c. if an employer reduces wages for all workers during economic downturn, then the best workers more likely to leave, while the least attractive workers are more likely to stay. d. those already working for firms are "insiders," while new employees, at least for some time, are "outsiders.".
According to liquidity preference theory, the money-supply curve would shift rightward
a. if the money demand curve shifted right. b. if the Federal Reserve chose to increase the money supply. c. if the interest rate increased. d. All of the above are correct.
A monopolistic ally competitive industry is like a purely competitive industry in that:
A. Each industry produces a standardized product B. Non price competition is a feature in both industries C. Neither industry has significant barriers to entry D. Firms in both industries face a horizontal demand curve
What is the 4-firm concentration ratio of an industry with 25 firms each having an equal market share?
a. .16. b. .24. c. .20. d. .12.