The basic concepts used in the analytic framework of this text include all of the following EXCEPT
A) the not-for-profit nature of most financial institutions.
B) a basic supply and demand analysis to explain the behavior of financial markets.
C) an approach to financial structure based on transaction costs and asymmetric information.
D) the concept of equilibrium.
A
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Different nations answer the what, how, and for whom questions differently. China, for instance, builds dams using many workers and only a little capital equipment. The United States builds dams using a few workers and a lot of capital equipment
Which economic question are these two nations answering and why do the answers differ?
Refer to Figure 2-14. Which country has a comparative advantage in the production of snow cones?
A) Greenland B) They have equal productive abilities. C) Iceland D) neither country
Economists argue that the union wage advantage
A) has been estimated to be 100% in the private sector. B) in the private sector is a 4% increase in wages for union workers over nonunion workers. C) reached its height in 2000 in the private sector. D) has been close to zero since World War II in the private sector.
Consider the same monopoly situation as in the previous question. The firm's profit will be
a. 1,760 b. 1,660 c. 2,264 d. 6,728