If major traders believe the price of a stock should be higher than its current market price,
A) they have an incentive to sell the stock.
B) their actions will result in the information they possess being incorporated into the price of the stock.
C) there is little they can do because government regulation precludes their acting on what they know.
D) they should petition the Securities and Exchange Commission to authorize an adjustment in the price of the stock.
B
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A cost incurred in the production of a good or service and for which the firm does not need to make a direct monetary payment, is referred to as ________ cost
A) a minimized B) a maximized C) an explicit D) an implicit E) an invisible
Advocates of floating rate suggested it is favorable for economies for all of the following reasons EXCEPT
A) it discourages attack from foreign exchange speculators because of the fact that exchange rate adjustment is immediate. B) it helps stabilize the shock effect on unemployment in case of economic changes such as fall in export demand. C) it automatically matches the domestic inflation with ongoing foreign inflation. D) it gives every country the opportunity to guide its own monetary conditions at home. E) it brings the LR exchange rate to the level predicted by PPP without government policy decisions.
As a group, oligopolists earn the highest profit when they
a. achieve a Nash equilibrium. b. produce a total quantity of output that falls short of the Nash-equilibrium total quantity. c. produce a total quantity of output that exceeds the Nash-equilibrium total quantity. d. charge a price that falls short of the Nash-equilibrium price.
Accounting profits are typically
A) greater than economic profits because accounting profits do not include explicit costs. B) greater than economic profits because accounting profits do not include implicit costs. C) smaller than economic profits because accounting profits do not include explicit costs. D) equal to economic profits in the long run.