When a financial asset is first sold, the sale takes place in the ________ market, and subsequent sales take place in the ________ market
A) stock; bond
B) primary; secondary
C) investment; commercial
D) secure; risk
Answer: B
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By setting MR = MC, a competitive firm decides to sell 100 units when the market price is $20. The average cost of producing the 100 units is $18 per unit. If the firm has fixed costs of $500, then the firm should
a. shutdown b. expand production c. exit the industry d. increase their price
Which of the following best describes typical employer attitudes toward organized labor (unions) during the 19th century?
(a) Positive—unions could promote cooperation with management to achieve more efficient operations (b) Negative—union-promoted labor gains seized profits and encouraged inefficient behavior (c) Indifferent—unions had little impact on business profitability (d) Mixed—about half of employers favored unions and half opposed them
As China's auto production capability has evolved, it is unclear whether protection was beneficial or harmful. Why?
a. Accounting data must be translated from Chinese to English, and that is a difficult task. b. After 30 years of infant industry protection, the tariff on auto imports is still significant (a 25% tariff). c. China will probably never achieve exports, so whether any gains were made is unclear. d. Chinese consumers are exerting more market power, and they are opposed to any kind of import protection.
How would a behavioral economist characterize the effect of fairness on consumer decision making?
a. It is the most important determinant of consumer choice. b. It is not as relevant to consumer choice as framing biases. c. Although it is essential to the traditional economic model, it is not part of the behavioral economic model. d. It works in concert with a variety of other factors to affect consumer choice.