A lender who is worried that its cost of funds might rise during the term of a loan it has made can hedge against this rise without eliminating the chance to profit from a decline in the cost of funds by
A) buying futures contracts on Treasury bills.
B) selling futures contracts on Treasury bills.
C) buying put options on Treasury bills.
D) buying call options on Treasury bills.
C
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The imposition of a tax on a good enables the government to
A) raise the price received by sellers of the goods that have been taxed. B) lower the price paid by buyers for the goods that have been taxed. C) create a more efficient economic system. D) take part of consumer and producer surplus as tax revenue when the good is purchased. E) decrease the deadweight loss in this market.
If a demand curve shifts to the right, then
A) quantity demanded has decreased. B) quantity demanded has increased. C) demand has increased. D) demand has decreased.
The observed variations in practice patterns in different regions of the country are difficult to eliminate
a. because of the many alternative treatment options available for most ailments. b. due to the localized nature of most medical practice. c. because it is difficult to change the preferences of physicians and patients. d. the observed variations are so minor that they are of little concern to policy makers. e. responses a, b, and c are all true.
The difference between the amount consumers would be willing to pay and the amount they actually pay for a good is called
a. price elasticity of demand. b. consumer surplus. c. the substitution effect. d. income elasticity of demand.