Describe what is likely to happen to the average price of a share of stock if the stock markets decide to close every Friday and Monday to provide workers at the exchanges with longer weekends.
What will be an ideal response?
The average price of stocks would decrease. The fact that the markets are open less decreases the liquidity of stocks and, as a result, their prices would have to be lower in order to entice savers to hold these instruments.
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A decrease in equilibrium price and an increase in equilibrium quantity could be brought about by a(n)
a. increase in demand b. decrease in demand c. increase in resource prices d. improvement in production technology e. favorable shift in tastes and preferences
If it is NOT possible for a pharmaceutical drug maker to sell its generic cholesterol reducing drug along with some name brand cholesterol reducing drugs, we have an example of monopoly due to
A) ownership of key resources. B) governmental entry restrictions. C) economies of scale. D) pure competition.
Medicare subsides will cause people to
A) consume less medical services than in the absence of the subsidies. B) consume more medical services than in the absence of the subsidies. C) consume the same amount medical services as they would if there were no subsidies. D) be sicker because of inferior care.
If pollutants from smoke stacks in a city such as Newark causes people to paint their homes and cars more frequently, this implies
A. external costs on home and car owners. B. external benefits to the home and car owners. C. internal cost to home and car owners. D. none of these.