A firm's net worth is equal to the value of its
A) assets minus the value of its liabilities.
B) liabilities minus the value of its assets.
C) common stock minus the value of its outstanding bonds.
D) outstanding bonds minus the value of its common stock.
A
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Which of the following transactions directly leads to a surplus on the U.S. capital and financial account?
A) An American purchases a share of stock on the Tokyo exchange. B) An American sells wheat to an African nation. C) A Japanese resident purchases a U.S. government bond. D) A resident of France visits the United States.
Which of the following is a difference between a corrective tax and a corrective subsidy?
a. A corrective tax leads a market to allocative efficiency, while a corrective subsidy does not lead to allocative efficiency. b. A corrective tax eliminates deadweight loss, while a corrective subsidy does not eliminate deadweight loss. c. A corrective tax is useful in the case of negative externalities, while a corrective subsidy is useful in the case of positive externalities. d. A corrective tax operates by decreasing the private cost of production, while a corrective subsidy operates by decreasing the private benefit of consumption.
A small country is considering imposing a tariff on imported wine at the rate of $5 per bottle. Economists have estimated the following based on this tariff amount: World price of wine (free trade):$20 per bottleDomestic production (free trade):500,000 bottlesDomestic production (after tariff):600,000 bottlesDomestic consumption (free trade):750,000 bottlesDomestic consumption (after tariff):650,000 bottles The consumption effect of the tariff on wine is worth about
A. $3.5 million. B. $2.75 million. C. $500,000. D. $250,000.
A person who practices poisonous snake charming and does not reveal this to her health insurance company before purchasing insurance is an example of
A) moral hazard. B) adverse selection. C) signaling. D) screening.