Government-backed deposit insurance ________
A) protects "good" banks from the misdeeds of "bad" banks
B) is intended to encourage banks to pursue high-risk activities
C) is an example of prudential regulation
D) is an example of government-directed credit
A
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Supply can shift due to changes in price.
Answer the following statement true (T) or false (F)
All of the following represent differences between stocks and bonds except
A) the future growth of a stock is more uncertain than the payments of a bond. B) differences of opinion about a stock's future may vary considerably but there is less difference about a bond's future. C) bonds represent partial ownership in a firm but stocks do not. D) a stock can possibly pay dividends forever, but bonds have a fixed number of payments.
Requiring a firm with international operations to follow the standards of its home country instead of those of the foreign country has all of the following advantages EXCEPT
A) it takes care of the fear of a race-to-the-bottom by making it impossible for a home-based company to exploit low standards. B) it shifts the costs of improved standards to firms and consumers in high-income countries. C) it removes the threat of domestic firms relocating abroad for low standards and ensures that any relocation that takes place is due to foreign comparative advantage. D) it avoids the problems of high-income countries dictating what standards are to be used. In this situation, firms that cross national boundaries must conform to whichever standards are higher. E) it is a comprehensive measure, since it addresses the problem of production in foreign firms as well as firms from high-standards countries that relocate abroad.
Ricky and Anita are 10 year-olds who have a lemonade stand on a busy beach and would like to practice price discrimination. They know that they are the only sellers of lemonade on the beach and that adults have a less elastic demand for lemonade than kids so they decide to sell their lemonade for $0.25 to kids and $0.50 to adults. Will their price discrimination be successful? Why or why not?
A. Yes, they have all of the necessary criteria to successfully price discriminate. B. Yes, the only necessary conditions is that they know the relative elasticities of the market segments. C. No, the kids who buy their lemonade can practice arbitrage. D. No, Ricky and Anita are price takers.