High-value, long-term projects benefit from:
A. frequent turnover of lenders in the financial sector.
B. leveraging illiquid assets.
C. long-term relationships between lenders and borrowers.
D. high and volatile inflation rates.
Answer: C. long-term relationships between lenders and borrowers.
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A horizontal demand curve is perfectly elastic because a change in price will not induce a change in quantity demanded.
Answer the following statement true (T) or false (F)
A price taking firm is able to sell its product just slightly above the current market price.
Answer the following statement true (T) or false (F)
Nick owns a dog whose barking annoys his neighbor Jane. Suppose that the benefit of owning the dog is worth $500 to Nick, and that Jane bears a cost of $700 from the barking. Assume that the city has no ordinance against barking dogs. A possible private solution that would benefit both parties is for: a. Jane to pay Nick $450 to get rid of the dog
b. Nick to pay Jane $650 for her inconvenience. c. Jane to pay Nick $650 to get rid of the dog. d. There is no private solution that would improve this situation for both parties.
If an excise tax is imposed on steak,
a. the government's tax revenue will decrease b. the government's tax revenue will increase c. the amount of steak produced and sold will increase d. the market price of steak will decrease e. the market price will rise but the market quantity will be unaffected