By Marks buys a one-year German government bond (called a bund) for $400. He receives principal and interest totaling $436 one year later. During the year the CPI rose from 150 to 162, but he had thought the CPI would be at 159 by the end of the year. By Marks had expected the real interest rate to be ________, but it actually turned out to be ________.
A. 8%; 1%
B. 3%; 1%
C. 6%; 3%
D. 1%; 3%
Answer: B
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A perfectly competitive firm produces 50 units of output, at equilibrium, in the short run. The total cost borne by the firm is $300 and the average revenue is $2 . Therefore, the firm:
a. is just breaking even. b. is earning positive profits. c. is facing a positively sloped demand curve. d. is suffering losses. e. is experiencing diseconomies of scale.
How large a firm becomes is determined by
A) the demand for its product. B) the availability of economies of scale. C) the availability of economies of scope. D) the availability of specialized managers.
According to the text discussion of efficient capital markets, which of the following would a well-trained economist recognize as logical and expected?
A. Experienced investors pay handsome sums to get investment advice from expert advisors B. Monkeys throwing darts at a financial page can hit stocks that perform as well as stocks picked by financial experts C. The best managed companies usually earn higher returns than companies rated lower on the list of well managed companies D. Only expert investors should invest in the stock market
Which of the following conditions is TRUE for a profit-maximizing firm in a perfectly competitive industry?
A. MC = AVC B. ATC = AFC C. MR = TC D. MR = MC