Explain the difference between American and European options.
What will be an ideal response?
American options can be exercised on any date from the time they are written until the date they expire. As a result, the holder of an American option has three choices; (1) continue to hold the option; (2) sell the option to someone else; (3) exercise the option immediately. The holder of a European option has only two options on a date prior to expiration, hold or sell.
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Carefully define the following terms and explain their importance to the study of economics. a. Resources b. Rational decision c. Scarcity d. Opportunity cost
What will be an ideal response?
The Roomba 570 is a robotic vacuum cleaner made and sold by iRobot. It can vacuum 4 rooms on a single battery charge and it costs $2 worth of electricity to charge the Roomba
Lynn is a house cleaner and can vacuum 4 rooms in 1 hour with a traditional vacuum. Suppose you want the 4 rooms in your house vacuumed once a week for one year. Ignoring the cost of any electricity Lynn uses, which method is economically efficient if Lynn charges $20 per hour? $30 per hour? A) Roomba if Lynn charges $20 per hour and Lynn if she charges $30 per hour B) Lynn if she charges $20 or $30 per hour C) Roomba if Lynn charges $20 or $30 per hour D) Lynn if she charges $20 per hour and Roomba if Lynn charges $30 per hour
The costs to firms of changing prices are called
A) menu costs. B) redistribution costs. C) anticipation costs. D) money illusion costs.
Sources of stress include all but which of the following:
a. Hurricanes, tornadoes, floods and other such natural events b. Angry family members and friends c. Clutter, mental and physical d. All of the above are potential sources of stress