Other things equal, the prospect of imitation by others:
A. decreases the expected rate of return on R&D expenditures.
B. increases the expected rate of return on R&D expenditures.
C. increases the interest-rate cost of funds used to finance R&D expenditures.
D. decreases the interest-rate cost of funds used to finance R&D expenditures.
Answer: A
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Suppose a perfectly competitive firm and a monopolist are both charging $5 for their respective products. From this, one can infer that:
A. the competitive firm is charging too much, and the monopolist is charging too little. B. the marginal benefit from selling an additional unit of output is $5 for the competitive firm and less than $5 for the monopolist. C. the marginal benefit from selling an additional unit of output is $5 for both firms. D. the marginal benefit from selling an additional unit of output is less than $5 for both firms.
Using the one-period valuation model, assuming a year-end dividend of $0.11, an expected sales price of $110, and a required rate of return of 10%, the current price of the stock would be
A) $110.11. B) $121.12. C) $100.10. D) $100.11
Which of the following could be considered to be a secondary effect caused by making drugs such as cocaine illegal?
a. The higher prices that result from making them illegal results in more property theft by users to afford the drugs. b. The usage of police and law enforcement resources to enforce drug laws leads to lower enforcement (and thus a higher amount) of other crimes. c. Without the ability to use the legal system to enforce contracts, violence often results when one party to a drug deal does not live up to their end of the bargain, thus the amount of violence increases by making drugs illegal. d. All of the above would be considered secondary effects of making drugs illegal.
Why does the president of the Federal Reserve Bank of New York hold a permanent seat on the FOMC?
A) The New York Fed is responsible for executing open market operations. B) A substantial amount of financial activity takes place in New York City. C) The Fed Board of Governors holds its regularly scheduled meetings in New York City. D) The Federal Reserve Bank of New York is the original Fed district; the other eleven districts were formed later by the Banking Act of 1935 E) a and b