Suppose you hedge with a put option. What are the consequences of selecting a put option with a lower strike price?
A. Higher premium, lower price floor.
B. Higher premium, higher price floor.
C. Lower premium, lower price floor.
D. Lower premium, higher price floor.
Ans: C. Lower premium, lower price floor.
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Why does a firm in monopolistic competition earn zero economic profit rather than an economic profit in the long run?
What will be an ideal response?
Which of the following statements is not correct?
a. Trade allows for specialization. b. Trade has the potential to benefit all nations. c. Trade allows nations to consume outside of their production possibilities curves. d. Absolute advantage is the driving force of specialization.
Lou and Alex live together and share household chores. They like to cook some meals ahead of time and eat leftovers. The accompanying table shows the number of rooms they can each clean and the number of meals they can each cook in an hour. Rooms Cleaned Per HourMeals Cooked Per HourLou54Alex33Which of the following is true?
A. Lou has both an absolute advantage and a comparative advantage over Alex in both tasks. B. Alex has both an absolute advantage and a comparative advantage over Lou in both tasks. C. Alex has a comparative advantage over Lou in cleaning. D. Lou has a comparative advantage over Alex in cleaning.
Answer the following questions true (T) or false (F)
1. If the number of firms producing mouthwash increases and consumer preference for mouthwash increases, the equilibrium price of mouthwash will definitely increase. 2. If the demand curve for a product shifts to the left and the supply curve for the product shifts to the left, the equilibrium quantity will decrease. 3. If the demand for a product decreases and the supply of the same product decreases, the equilibrium price will decrease.