Recent estimates of the elasticity of demand for cigarettes by adults
A. shows that it has remained remarkably constant, despite the existence of e-cigarettes.
B. shows that it has increased by only a small (and insignificant) amount.
C. shows that it has declined markedly, in part because of the existence of e-cigarettes.
D. shows that it has increased markedly, in part because of the existence of e-cigarettes.
Answer: D
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A cartel is a group of firms which agree to
A) behave competitively. B) raise the price of their product. C) lower the price of their product. D) increase the amount they produce.
Suppose interest rates are kept very low for a long time such that there is a spike in the amount of lending. Everything else held constant, this could cause ________ bubble
A) an irrational exuberance B) a credit-driven C) a stock D) a debt-driven
Risk Premium refers to
A) the average difference over a long period of the interest rate on long-term bonds and the interest rate on the short-term federal funds rate. B) the average difference over a long period of the interest rate on short-term financial instruments and the interest rate on the discount rates. C) the difference between the corporate bond rate and the risk-free rate of Treasury bonds. D) the difference between prime rate and the discount rate.
Statistical discrimination:
A. can limit the opportunities of individuals just because they happen to belong to a certain group of people. B. is an irrational response to information asymmetry. C. is always a legal solution to information asymmetry. D. All of these statements are true.