In a perfectly competitive industry, an individual firm faces
A. a perfectly elastic labor supply curve.
B. a perfectly inelastic labor supply curve.
C. a perfectly vertical labor supply curve.
D. none of these.
Answer: A
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Forces that cause long-run average cost to fall as output expands are known as
a. returns to scale. b. scale efficiencies. c. economies of scale. d. optimizing forces.
Diversification of a portfolio leads to:
a. a negative correlation between the investments. b. a lower mean of returns. c. a lower variance of returns. d. a higher standard deviation of returns.
The balance of trade account reflects only transactions associated with the international trade of goods
a. True b. False Indicate whether the statement is true or false
Which of the following was a contributing factor to the rising default and foreclosure rates beginning in the latter half of 2006?
a. the increasing share of 30-year, fixed rate loans as a share of outstanding mortgages b. the rigid standards of rating agencies, such as Moody's and Standard and Poors, which limited the development of mortgage-backed securities c. the price-stability policies of the Federal Reserve during 1998-2008 d. the erosion of lending standards during the preceding decade