Equity investors can choose to participate indirectly in real estate markets by purchasing shares in publicly traded real estate companies. In doing so, investors benefit from all of the following EXCEPT:
A. Low transaction costs
B. Risk sharing amongst investors
C. Highly segmented markets
D. High information efficiency
Answer: C. Highly segmented markets
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The economist that originated the idea that government can correct externalities through taxes and subsidization is:
A. John Nash. B. Arthur Cecil Pigou. C. Ronald Coase. D. Theodore Groves.
A winter ice storm has paralyzed the entire east coast, reducing productivity sharply. This supply shock shifts the marginal product of labor curve
A) up and to the right, raising the quantity of labor demanded at any given real wage. B) down and to the left, reducing the quantity of labor demanded at any given real wage. C) up and to the right, reducing the quantity of labor demanded at any given real wage. D) down and to the left, raising the quantity of labor demanded at any given real wage.
If a monopoly's demand curve shifts to the right, the monopoly
A) will charge a higher price. B) will charge a lower price. C) will sell more. D) decision cannot be determined.
A government wishing to maximize its tax revenues should
A) always assess the highest possible tax rate. B) always assess the lowest possible tax rate. C) determine the highest possible tax rate and then back it down by exactly 4 percentage points. D) push tax rates up to the point where revenues peak, but raise the tax rate no farther.