What is the main difference between the demand curves for the perfect competitor and the monopolist?
What will be an ideal response?
The perfect competitor faces a horizontal demand curve because it has no control over the market price. By contrast, the monopolist is the sole supplier of the entire industry so that it faces the industry demand curve, which is downward sloping.
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How do payments on a fixed-payment loan differ from a coupon bond?
What will be an ideal response?
Assume that the multiplier effect for Mexico is 0.85 for an increase in spending by the U.S. government by $1 . Therefore, a $20 billion decrease in spending by the U.S. government results in:
a. a $23.5 billion increase in Mexican real GDP. b. a $133.3 billion decrease in Mexican real GDP. c. a $3 billion decrease in Mexican real GDP. d. a $17 billion decrease in Mexican real GDP. e. a $23.5 billion decrease in Mexican real GDP.
Suppose the interest rate is 10 percent. Which of the following payments has the largest present value?
a. You receive $90.91 two years from today. b. You receive $82.64 one year from today. c. You receive $75.13 today. d. All of these payments have the same present value to the nearest cent.
Real GDP per person in Richland is $20,000, while real GDP per person in Poorland is $10,000. However, Richland's real GDP per person is growing at 1 percent per year, and Poorland's real GDP per person is growing at 2 percent per year. After 50 years, real GDP per person in Richland minus real GDP in Poorland is:
A. positive and greater than $10,000. B. negative. C. zero. D. positive but less than $10,000.