A budget line represents all the combinations of two good a consumer can buy with a given amount of money and fixed prices for the goods
a. True
b. False
Indicate whether the statement is true or false
True
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Economic models suggest that movie stars have salaries that
a. greatly exceed their marginal contribution to the movie studio's revenue. b. understate their full contribution to the movie studio's revenue-as the celebrities are the main reason that people go to see movies. c. are about equal to their marginal revenue products. d. can only be explained by looking at specific movie stars and their individual salaries.
The U.S. labor force participation rate has changed over time, as has the participation rate of various segments of the U.S. population due to social changes. Choose one social change that you expect to happen in the coming decades. Explain how this will affect the labor force participation rate of various demographic groups.
What will be an ideal response?
Because expected inflation is typically positive, we know that
A) the nominal interest rate is generally less than the real interest rate. B) the real interest rate is generally less than the nominal interest rate. C) the nominal and real interest rates are generally equal. D) the real interest rate is approximately equal to zero.
If an investor owns a well-diversified portfolio, then:
A. His portfolio does not involve any risk B. The idiosyncratic risk in his portfolio is minimized C. The systemic risk in his portfolio is minimized D. His portfolio will have the highest expected return