The statement, "If a deal is too good to be true, then it probably is not true," is most closely related to which core economic principle?
A. The Cost-Benefit Principle
B. The No-Cash-on-the-Table Principle
C. The Scarcity Principle
D. The Low-Hanging Fruit principle
Answer: B
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Why does the NPV of a college education tend to be positive but relatively small?
A) College students tend to be young and poor, so their opportunity cost of capital is high. B) College graduates typically have limited on-the-job skills, so their initial returns from the education investment tend to be small. C) There are few barriers to entry for a college education. D) Most of these studies are based on nominal interest rates, so the NPV is smaller than we would achieve under real interest rates.
A newspaper headline asserts: "Rising Demand Pushes Up Housing Prices." This headline
A) incorrectly implies that the demand for housing can change, whereas in fact only the quantity of housing demanded can change. B) incorrectly implies that the price of housing will rise when demand increases. C) incorrectly implies that more housing will be demanded at higher prices. D) correctly implies that an increase in demand will increase the market clearing price.
Total cost is calculated as
a. FC + MC b. FC / MC c. (VC + FC) / MC d. VC + FC e. VC ? output
Which of the following statements about the real loanable funds market is not true?
a. Movements in the real risk-free interest rate cause significant changes in borrowers' willingness and ability to tap the domestic credit market if the demand is highly inelastic. b. The more inelastic a nation's supply of real loanable funds, the less sensitive domestic savers, banks, foreigners, and governments are to changes in the real risk-free interest rate. c. Monetary policy is usually stronger in nations with elastic real loanable funds demands. d. Fiscal policy is usually weaker in nations with elastic loanable funds demands. e. All of the above are true.