The dividend-discount model predicts that stock prices:
A. will be high when interest rates are high.
B. should be high when dividends are high.
C. should be high when dividends are low.
D. will be higher when the growth rate of dividends is low.
Answer: B
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An externality occurs when ________
A) the quantity demanded of a good exceeds the quantity supplied B) the quantity supplied of a good exceeds the quantity demanded C) the government regulates production and consumption decisions D) an economic activity affects third parties not engaged in the activity
"Price discrimination allows a monopoly to increase its economic profit by capturing part of the consumer surplus and turning it into economic profit
" Is the previous statement correct or incorrect? If the statement is correct, why is it important in understanding firms' behaviors? If it is incorrect, why is it incorrect?
Corporations that offer incentive pay schemes that link pay to meeting profit, production, or sales targets are doing so to cope with the
A) scarcity problem. B) inefficiencies usually found in large firms. C) principal-agent problem. D) problems of unionization.
The mayor of Workerville proposes a local payroll tax to fund a new water park for the city. The mayor proposes to collect half the tax from workers and half the tax from firms. Workers will bear
a. an equal share of the tax in comparison to firms. b. a greater share of the tax in comparison to firms. c. a smaller share of the tax in comparison to firms. d. All of the above are possible.