Miniville is an isolated town located on the southern shore of Lake Condescending, a very large lake. The western edge of Miniville is adjacent to impassable mountains and there are no towns or businesses for many miles to the east. The 300 residents of Miniville are evenly distributed along 3 miles of shoreline on the lake, east of the mountains. Lake Shore Drive, the only street in town, provides access to Miniville's homes and businesses. All residents live between the lake and the street; businesses locate on the other side of the street. Lake Shore Drive is 3 miles long, and the points labeled A, B, and C are 1, 2, and 3 miles from the western end of Lake Shore Drive, respectively. All residents of Miniville shop at the store located closest to their homes.

src="https://sciemce.com/media/4/ppg__1420829190927__f1q535g1.jpg" alt="" style="vertical-align: 0.0px;" height="113" width="397" />If the first store to open in Miniville is located at A, to maximize the number of customers it attracts, the next store to open should locate:

A. just west of A.
B. just east of A.
C. at C.
D. at B.

---

Answer: B

Economics

When the housing bubble began to burst in 2006, investors became

A) more likely to purchase mortgage-backed securities since mortgage values had declined significantly, making the securities a better value. B) less likely to purchase mortgage-backed securities since the default rate on mortgages began to rise. C) more likely to purchase mortgage-backed securities since the higher rate of return made these investments much more profitable. D) less likely to purchase mortgage-backed securities since the government virtually took over the mortgage market.

The introduction of a tax in a perfectly competitive marketplace that is originally in equilibrium will only affect consumer’s surplus and not producer’s surplus.

Answer the following statement true (T) or false (F)

Which of the following is a major problem with deflation?

A) Money loses value so rapidly that economic agents will be reluctant to hold money. B) Economic agents tend to put off purchases in anticipation of lower prices for goods and services, leading to a downward spiral in economic activity. C) Low prices for goods and services tend to result in massive shortages in most markets. D) Money supply cannot keep pace with consumption spending.

Can a financial instrument be bought and sold in both a primary and secondary financial market? Explain.

What will be an ideal response?