Adjustable rate mortgages
A) reduce the interest-rate risk for financial institutions.
B) benefit homeowners when interest rates rise.
C) generally have higher initial interest rates than conventional fixed-rate mortgages.
D) allow borrowers to avoid paying interest on portions of their mortgage loans.
A
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Graphically, all else constant, a decrease in the price of labor would be illustrated by:
A) a parallel shift of the isocost line in toward the origin. B) rotating the isocost line away from the origin along the labor axis. C) a parallel shift of the isocost line away from the origin. D) rotating the isocost line in toward the origin along the capital axis.
The total welfare cost of a monopoly that engages in rent-seeking activities
a. equals only the portion of lost consumer surplus that is not transferred to the monopolist b. includes the use of resources devoted to rent seeking c. equals the total reduction in consumer surplus d. equals the total economic profit earned by the monopolist e. excludes the use of resources devoted to rent seeking
If two goods are often consumed together, they are
a. substitute goods b. inferior goods c. complementary goods d. normal goods e. unrelated goods
When two variables have an inverse relationship, the slope is
A) negative. B) positive. C) infinity. D) zero.