In the above figure, a price ceiling of $2 would
A) create a shortage.
B) create a surplus.
C) have no effect.
D) cause the demand curve to shift leftward.
A
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Is the stock of a corporation with an excellent earnings record likely to be a better buy than the stock of a corporation doing very badly?
A) No, because the price of each stock will reflect differing situations. B) Only if their different earnings records have persisted for several years. C) Yes, because stocks with large dividend returns to owners are always good buys. D) Yes, because the future is more likely to resemble the past than to differ from it in any systematic way.
The European Economic and Monetary Union
A) set up a single currency and sole bank for European economic monetary policy. B) eliminated all barriers to trade such as tax differentials between borders. C) produced a single government for handling European affairs. D) created the Common Agricultural Pact. E) eliminated all local currencies in Western Europe.
The most fundamental proposition of modern portfolio theory is that
A) investment risk is reduced by investing in on security. B) the smaller the standard deviation is, the larger is the risk of a portfolio. C) even though an asset is risky in isolation, when combined with other assets the risk of the portfolio is less, perhaps even zero. D) uncertain outcomes make for risky investments.
The demand curve that a monopolist firm faces is
a. the same as the demand curve facing a perfectly competitive firm except the monopolist is a price maker and the competitive firm is a price taker b. the same as the demand curve facing a perfectly competitive firm except the monopolist is a price taker and the competitive firm is a price maker c. horizontal, because there are no close substitutes for its product d. the same as its industry demand curve e. vertical, because there are no close substitutes for its product