What role do well-functioning financial markets play in a market economy?
What will be an ideal response?
They allocate saved funds to the best use of these funds.
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If two events are positively correlated but NOT perfectly correlated, then
A) diversification is not necessary since there is no risk. B) diversification eliminates all risk. C) diversification does not reduce risk at all. D) diversification can reduce risk.
Figure 11-7
For the firm in Figure 11-7, an unregulated monopolist, profit-maximizing output is below the long-run competitive level by how much?
A. 100 B. 75 C. 50 D. 25
Assume that Laura will get $500 from her parents when she graduates from college one year from today. If the market interest rate is 8 percent, then what is the present value of that $500?
a. $359.12 b. $428.67 c. $462.96 d. $483.11
Consumers may not experience the benefits of economies of scale because a natural monopoly
A. Increases output beyond efficient levels. B. Has higher costs with higher output. C. Engages in marginal cost pricing. D. Charges prices higher than competitive levels.