There are many concerns for risk-averse lenders. Consider the following: 1 . Lenders are concerned that borrowers with the greatest risk are the ones most likely to actively pursue loans. 2 . Lenders are concerned that real GDP will decline leading to reduced corporate profits. 3 . Lenders are concerned that products produced by certain corporations will become obsolete
a. 1 is market risk; 2 is firm-specific risk
b. 2 is market risk; 3 is firm-specific risk
c. 3 is market risk; 1 is firm-specific risk
d. 2 is firm-specific risk; 3 is market risk
b
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Suppose that a company produces at a point where its MR is $430 and its MC is $105, this implies that
a. the firm earns a total profit of $325 at that output level b. the firm’s total costs are rising faster than its total revenue c. the firm’s total profit is rising, suggesting that the firm should expand production d. each unit of output generates an average profit of $325
Consumers are sovereign when
A) prices are decided by sellers. B) a few consumers exercise coercion on sellers and other consumers. C) they can prevent market failure. D) they have the freedom to decide what they wish to purchase.
In order to hire additional laborers, a monopsony must
A. raise the wage rate. B. lower the supply of labor. C. advertise for the labor. D. do nothing.
Countries with high rates of economic growth tend to have
A) a labor force that is more productive. B) a lower life expectancy at birth. C) low rates of technological advancement. D) a declining incidence of business cycle fluctuations.