When a local casino spends millions in TV ads convincing town residents to reject another casino's bid to operate in the area, the most that the casino would be willing to spend is:
A. the producer surplus gained by being a monopoly.
B. the consumer surplus gained by being a monopoly.
C. deadweight loss.
D. total economic surplus.
Answer: A
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If the present value equation used to calculate the price of a stock you are considering buying is "[$7 / (0.04 - 0.03)]," which of the following is correct, assuming that dividends will grow at a constant rate?
A) The stock price is $7, the dividend growth rate is 3 percent, and the interest rate is 1 percent. B) The stock price is $700, the dividend growth rate is 3 percent, and the interest rate is 4 percent. C) The dividend is $7 per share, the dividend growth rate is 1 percent, and the interest rate is 4 percent. D) The dividend is $7 per share, the dividend growth rate is 4 percent, and the interest rate is 3 percent.
We can be more confident that standard deviation is a good measure of the risk of an asset (held in isolation) when
A) the number of different possible returns on the asset rises. B) the probabilities attached to the possible returns on the asset are less equal. C) the possible returns on the asset are distributed symmetrically around the mean. D) the asset has a longer maturity.
What is the growth rate of multifactor productivity if b = 0.20, k = 3, n = 1, and y = 4?
A) 1.0 B) 0.4 C) 2.4 D) 2.8
If demand for a given good is perfectly elastic, it follows that
a. as price changes, quantity demanded does not change. b. as price changes, quantity demanded changes by a larger percentage. c. as price changes only a small percentage, quantity demanded falls to zero. d. as income changes only a small percentage, quantity demanded changes by a very large percentage. e. none of the above