An option allowing the holder to buy an asset in the future is a
A) put option.
B) call option.
C) swap.
D) forward contract.
B
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The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot Pillows, a single-price monopoly producer of pillows stuffed with parrot feathers. When Paul maximizes his profit, the price per pillow is
A) $70. B) $60. C) $40. D) $100. E) $30.
The basic cause of deadweight losses from the existence of common resources and externalities is
A) the use of a market system to deal with scarcity. B) the self-interested rationality of human beings. C) the absence of government intervention. D) a lack of clearly defined and enforceable property rights.
How does an expansionary monetary policy affect aggregate expenditures according to the bank lending channel?
What will be an ideal response?
A firm combines two resources, A and B, to produce an output Q. Their respective marginal revenue products are $30 and $21. A costs $15 a unit and B $7 a unit. To reduce the cost of Q:
A. More B and less A should be used B. More A and less B should be used C. More of both resources should be used D. Less of both resources should be used