Suppose that the nominal rate of interest is 7% and the inflation rate is 3%. The real rate of interest is equal to:
What will be an ideal response?
4%
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Many residents of the city of Adelphia drive without automobile insurance. Assuming that Adelphia is just like any other city and these are risk averse individuals, which of the following is most likely TRUE?
A) Economic models do not work. B) These people maximize wealth. C) The price of automobile insurance exceeds their maximum value of insurance. D) There are no automobile accidents or thefts in the city of Adelphia.
Figure 10-2
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Figure 10-2 shows demand and short-run cost curves for a perfectly competitive firm. At its profit-maximizing output, the firm’s total ____ is represented by area ____.
A. loss; GBHC B. profit; ADGHC C. loss; ADEC D. profit; EGH
Banks that were so large in terms of assets or customers, or so historically important, that banking regulators allowed the bank to keep operating despite insolvency after the housing market crash were called:
A. too small to fail. B. too large to succeed. C. too small to succeed. D. too large to fail.
For a perfectly competitive firm, the marginal revenue curve has ________ point(s) in common with the firm's demand curve.
A. all B. one C. no D. indeterminate from the given information