A bond with no expiration date has a face value of $10,000 and pays a fixed 10% interest. If the market price of the bond rises to $11,000, the annual yield approximately equals
A. 11%.
B. 10%.
C. 8%.
D. 9%.
Answer: D
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Which of the following statements is true?
A) The supply of oil is perfectly inelastic; therefore, as the demand for oil increases over time the price of oil increases significantly. B) The supply of oil is very inelastic over short time periods but becomes more elastic over time. A given shift in supply results in a smaller increase in the price of oil when the supply is more elastic. C) Over short periods of time increases in the demand for oil are greater than increases in the supply of oil. Over the long run increases in the demand and the supply of oil are about equal. As a result, the price of oil increases greatly in the short run but is stable in the long run. D) The supply of oil is very elastic over short time periods but becomes perfectly inelastic over time. A given shift in supply results in a greater increase in the price of oil when the supply of oil is perfectly inelastic.
Refer to the above figure. A surplus occurs if the government imposes
A) a price floor at $60. B) a price floor at $20. C) a price ceiling at $60. D) a price ceiling at $20.
A motorist who chooses high-deductible versus low-deductible car insurance is signaling that he is:
A. a safe driver. B. a reckless driver. C. likely to be a low income earner. D. likely to not pay.
A monopolistically competitive firm
A. must raise price to sell more output. B. must lower price to sell more output. C. sells a fixed amount of output regardless of price. D. can sell an infinite amount of output at the market-determined price.