Explain why the law of one price may best be applied to financial assets.
What will be an ideal response?
Financial assets, for example shares of Microsoft stock, are ideal for explaining the law of one price. First of all, they are a homogeneous good; all shares of Microsoft stock are identical. Secondly, the transaction costs of shipping them can be extremely low, especially if they are sent electronically. Third, there are stock exchanges and dealers all over the world who are diligently watching for price differentials to profit from and so act on these differentials (arbitrage).
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To be officially counted as unemployed, a person must be
A) at least 16 years old. B) at least 18 years old. C) at least 21 years old. D) any age, so long as you are looking for work.
Describe what happens to nominal and real interest rates, investment and aggregate demand when money supply shifts right or left, other things equal. When money demand shifts right or left
When the supply curve of land is upward sloping and intersects the demand curve at $30 per acre, then the last acre brought into production receives
a. $30 in land rent b. $0 in land rent c. average land rent of somewhere between $0 and $30, depending on the price of land d. land rent equal to the price of an acre of land e. land rent greater than $30 because the last acre is located to the right (in the land market graph) of the intersection of the demand and supply curves
A rational consumer will cease purchasing a product at that quantity where marginal utility begins to diminish.
a. true b. false