How does an economy represented by a straight-line production possibilities curve differ from one represented by a traditional production possibilities curve with a bowed shape?
A. In the economy represented by a straight-line production possibilities curve, the law of increasing relative cost does not apply.
B. In the economy represented by a straight-line production possibilities curve, neither good is scarce.
C. In the economy represented by a straight-line production possibilities curve, there is no opportunity cost.
D. In the economy represented by a straight-line production possibilities curve, changing the amount of resources devoted to the production of each good will not alter the amount of each good actually produced.
Answer: A
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You have a bond that pays $125 per year in coupon payments. Which of the following would result in an increase in the price of your bond?
A) The likelihood that the firm issuing your bond will default on debt increases. B) Coupon payments on newly-issued bonds rise to $140 per year. C) The price of a share of stock in the company falls. D) Coupon payments on newly-issued bonds fall to $75 per year.
Taxation alters the behavior patterns of individuals
a. True b. False Indicate whether the statement is true or false
Lemon laws that allow consumers to return low-quality used cars are designed to help solve the problem of ________ in used car markets.
A. moral hazard B. thick markets C. experience ratings D. adverse selection
Refer to the information provided in Figure 18.1 below to answer the question(s) that follow.
Figure 18.1Refer to Figure 18.1. Suppose that the Lorenz curve ________. This would mean that the distribution of income is equal.
A. was above the 45-degree line OB B. was perfectly vertical C. was below the 45-degree line OB D. was the same as the 45-degree line OB