You would expect the price of a share of stock to fall if
A. the expected dividend of the stock rose.
B. the price level were rising.
C. the economy went into recession.
D. all of the above.
Answer: C
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According to the theory of rational expectations,
a. workers' experience tells them that government action to lower unemployment will not affect inflation. b. consumers and investors generally behave so that rationally formed government attempts to stimulate aggregate demand have their desired effects. c. policy goals can be achieved easily in the short run. d. workers' wage demands include anticipated inflation. e. expansionary monetary policy will lead to permanent interest rate declines.
A consumer is maximizing utility when
A. the consumer has spent all of his income. B. the slope of the budget constraint has reached -1. C. diminishing marginal utility has set in. D. the slope of the budget constraint equals the marginal rate of substitution.
Max has allocated $100 toward meats for his barbecue. His budget line and an indifference map are shown in the above figure. What is the price of chicken?
A) $0.80/lb B) $1.25/lb C) $4/lb D) $5/lb
In order to maximize social welfare, a firm's production of a good should occur at the output where
A. Social marginal cost equals social marginal benefit. B. Price equals social marginal revenue. C. All pollution is entirely eliminated. D. Marginal revenue equals price.