Explain the process by which prices of securities adjust so as to eliminate arbitrage profits
What will be an ideal response?
In competing to buy securities where earning arbitrage profits is possible, traders force prices up to the level where arbitrage profits can no longer be earned.
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The first mover in an extensive-form game should use ________ to win the game
A) forward induction B) backward induction C) pure strategies D) mixed strategies
Hank's Propane Storage Company is a profit-maximizing monopsony in the local labor market for propane handling, delivery, and other associated services. The supply and marginal cost of labor curves are shown in the figure above
Hank's demand for labor curve is the curve labeled VMP = D. At what level should a minimum wage be set in order to achieve the wage rate and quantity of employment that would be attained in a competitive labor market? A) $4 per hour B) $6 per hour C) $8 per hour D) $12 per hour
“Economics cannot be scientific because it is based upon the value judgment that ‘more (output) is better’.” Do you agree?
Please provide the best answer for the statement.
Preferred Budgets ($ in millions)45678910Number of voters (in thousands)516253022193Table 15.3Table 15.3 shows the preferred budget for a new performance center and the number of voters in a community who prefer that budget. If Dawn proposed $5 million while Terry proposed $9 million, whose budget will be selected if everyone votes?
A. Dawn's B. Terry's C. It is a tie. D. The outcome cannot be predicted.