If the payment to an input is pure economic rent, then reducing that payment will:
A. Not influence the availability of the input
B. Increase the quantity supplied of the input
C. Decrease the quantity supplied of the input
D. Decrease the demand for the input
A. Not influence the availability of the input
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In an open outcry Dutch auction, ________
A) the bidders begin the bidding process with a low starting bid B) the auctioneer begins the bidding process with a low starting bid C) the auctioneer begins the bidding process with a high starting bid D) the bidders decide the starting bid
Assume the price elasticity of demand for a product is -4. In this case, the firm's optimal markup is (approximately):
A) 400 percent. B) 100 percent. C) 33 percent. D) 25 percent.
The basic concepts used in the analytic framework of this text include all of the following EXCEPT
A) the not-for-profit nature of most financial institutions. B) a basic supply and demand analysis to explain the behavior of financial markets. C) an approach to financial structure based on transaction costs and asymmetric information. D) the concept of equilibrium.
The causes of the skyrocketing mortgage default rates that triggered the financial crisis in 2007-2008 include the following, except:
A. Mortgage lending became very lax B. Many people took on mortgages that they were simply incapable of repaying C. Housing price increased drastically D. Real estate values started declining after having risen for many years