Why do publishers print the first edition of a book by a popular author in hard cover and not in paperback?
A) Hard cover books are long lasting and paperbacks can rip easily.
B) Readers who want to read the book as soon as it comes out will be willing to pay a higher price compared to those who can wait for the paperback edition.
C) A hardcover is the publishers' way of rewarding the avid readers.
D) Publishers are not sure of the demand.
E) Publishers cannot price discriminate.
B
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Changes in market prices tend to
A) change the plans of suppliers. B) change the plans of demanders. C) change the plans of suppliers and demanders. D) have no predictable effect on anybody's plans.
Explain how the labor market and the production function determine potential GDP
What will be an ideal response?
The default risk premium is
A) relevant only for securities issued by very small companies. B) the additional yield a saver requires for holding a bond with some default risk. C) zero for corporate bonds, but quite substantial for corporate stock. D) constant across the business cycle.
Refer to the above figure. Point c is
A. unobtainable. B. where economists always want a nation or company to achieve. C. efficient. D. inefficient but obtainable.