Assume you pay a premium of $0.80/bu for a put option with a strike price of $6.00/bu and that the current futures price is $5.50/bu. Then, the option is in-the-money by:
A. $0.00/bu since there is no intrinsic value in this put option
B. $0.30/bu
C. $0.50/bu
D. $0.80/bu
Ans: C. $0.50/bu
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A central bank's attempt to prevent an appreciation of its currency can stimulate domestic inflation if the ________ of its currency leads to ________ international reserves which ________ the monetary base
A) purchase; higher; increases B) purchase; lower; decreases C) sale; lower; decreases D) sale; higher; increases
To promote economic efficiency, government should
A. keep all prices as low as possible. B. keep all prices high so that people will save more money. C. allow the market to set low prices for abundant goods and high prices for scarce goods. D. never interfere with firms’ price setting powers.
If advertising decreases the elasticity of demand for specific brand names of hard liquor, we would expect firms to be able to charge a larger markup over marginal cost
a. True b. False Indicate whether the statement is true or false
The amount of money consumers pay producers is
A. the area under the demand curve from the origin to the quantity purchased. B. the area under the demand curve but above the price line from the origin to the quantity purchased. C. the price times the quantity or the rectangle whose height is the price and base is the quantity purchased. D. the area under the supply curve from the origin to the quantity produced.