Some good did come from the internet bubble of the late 1990s. One good thing was that:
A. people learned they should not invest in dotcom companies.
B. the theory of efficient markets doesn't always hold and consistently better-than-market returns are achievable.
C. start-up companies found they could bypass venture capitalists and raise funds directly from the capital markets.
D. stock market bubbles do not have to result in an inefficient allocation of resources.
Answer: C
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Farmers selling some of their soybeans in storage because they anticipate a lower price of soybeans in the near future would cause a
A. movement up along the current supply curve of soybeans. B. rightward shift in the current supply of soybeans. C. movement down along the current supply curve of soybeans. D. leftward shift in the current supply of soybeans.
If the market price is $50 for a unit of a good produced in a perfectly competitive market and the firm's minimum average variable cost is $52, then to maximize its profit (or minimize its loss) the firm should
A) definitely produce the unit. B) shut down. C) not produce the unit but remain open. D) not produce the unit. Whether the firm should shut down or remain open cannot be determined without more information. E) produce the unit only if the price exceeds the average fixed cost.
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.
A municipal bond is
a. issued by the federal government.
b. issued by state and local governments.
c. issued by corporations.
d. issued by households.