Considering a call option, if the price of the underlying asset decreases:
A. the intrinsic value of the option decreases if it is above zero.
B. the value of the option increases.
C. the strike price decreases.
D. the intrinsic value of the option increases if it is above zero.
Answer: A
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Suppose the current equilibrium wage rate for landscapers is $6.65 in Little Rock; $7.50 in St. Louis and $9.05 in Raleigh. An increase in the minimum wage to $7.50 per hour results in unemployment of landscapers in
A) Little Rock and St. Louis. B) only Raleigh. C) Little Rock, St. Louis, and Raleigh. D) only Little Rock. E) St. Louis and Raleigh.
For consumers, goods A and B are complementary goods. The cost of a resource used in the production of A decreases. As a result
A) the equilibrium price of B will fall and the equilibrium price of A will rise. B) the equilibrium price of B will rise and the equilibrium price of A will fall. C) the equilibrium prices of both A and B will rise. D) the equilibrium prices of both A and B will fall.
A monopoly faces an inverse demand curve of P = 100 - 2Q. The marginal cost curve is MC = .5Q. What government price ceiling would represent optimal price regulation?
What will be an ideal response?
Industry A has four firms, each with a 25% market share while industry B has four firms, one firm with a 70% market share and the other three firms with 10% each. According to the Herfindahl-Hirschman Index, industry A is more highly concentrated
a. True b. False