A diagonal straight line on a Lorenz curve represents
A) a perfectly unequal distribution of income (one person has everything).
B) a perfectly equal distribution of income.
C) a high level of inequality in the distribution of income.
D) an oblique distribution of income.
Answer: B
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Average fixed cost is
A) AC minus AVC. B) TC divided by Q. C) AVC minus MC. D) TC minus TVC.
Answer the following statement(s) true (T) or false (F)
1. As long as it is generally accepted in exchange for services and goods, anything can be considered money. 2. Money has two main economic functions: to act as a medium of exchange and to act as a store of value. 3. Naya knows that a pound of wild rice costs $3.49 and that a pound of granulated sugar costs $0.89. The fact that she can determine this illustrates money’s function as a means of stored value. 4. Fiat money is money that has been established by custom or tradition. 5. Savings deposits are considered part of the M2 definition of money, but not the M1 definition.
A share of stock resembles a consol in all of the following ways except that the:
A. annual dividend the stock pays resembles the coupon on a consol. B. are both residual claims. C. share of stock does not have a maturity date. D. prices of both can be computed using a variation of the net present value formula.
The second-order condition for a firm maximizing its profit operating in a monopolistically competitive market is:
A. (dMR/dQ) > (dMC/dQ). B. (d2R (Q)/dQ2) ? (d2C(Q)/dQ2) < 0. C. ?(d2C(Q)/dQ2) < 0. D. (d2R (Q)/dQ2) = (d2C(Q)/dQ2).