Which of the following statements best describes financial instruments?
A. Financial instruments can transfer resources between people but not risk.
B. Financial instruments can transfer risk but not resources between people.
C. All financial instruments are a means of payment.
D. Financial instruments can transfer resources and risk between people.
Answer: D
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The above figure shows the market for steel ingots. If the market is competitive, then the deadweight loss to society is
A) a. B) b. C) c. D) zero.
The authors feel subsidies destroy wealth because
a. subsidies move assets from lower- to higher- valued uses b. subsidies move assets from higher- to lower- valued uses c. subsidies help producers only d. subsidies help consumers only
Wilma values a decorative garden rock at $15, while Fred values it at $10 . The price of a decorative garden rock is $9 . If the government imposes a $2 tax per decorative garden rock and the price of the rock rises to $11, what part of the deadweight loss comes from Wilma, and what part comes from Fred?
a. none comes from Wilma; $1 comes from Fred b. none comes from Wilma; $3 comes from Fred c. $2 comes from Wilma; $1 comes from Fred d. $4 comes from Wilma; $3 comes from Fred
The excess supply curve of a product we (H) import from foreign countries (F) increases as
A) excess demand of country H increases. B) excess demand of country F increases. C) excess supply of country H increases. D) excess supply of country F increases. E) excess supply of country F decreases.