Consider a potato farmer whose cost of production is $2.25 a bushel. In May, she expects that the potato when harvested in July will sell for either $2 a bushel or $3.00. She could avoid the probability of a loss by contracting to deliver the potatoes in July at $2.50. Such a contract is traded in a
a. futures market.
b. spot market.
c. portfolio market.
d. diversified market.
a. futures market.
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The value of all the equipment and structures of an economy is referred to as:
A) wealth. B) national income. C) asset value. D) capital stock.
When a tax is imposed on an item, it can generally be said that the incidence of the tax is
a. entirely on the buyer. b. entirely on the seller. c. on both the buyer and seller. d. not determined in this manner.
Private investment from a foreign country is known as
a. development assistance. b. foreign direct investment. c. technical progress. d. the cost disease of personal services.
Exhibit 1A-7 Straight line relationship
Using the relationship shown in Exhibit 1A-7, suppose the price of air travel increases. How would you revise the graph to show this change?
A. Draw a new point on the graph upward and to the left. B. Draw a new point on the graph downward and to the right. C. Draw a new line on the graph. D. Change the current line so that its slope is flatter.