An example of a derivative is a:
A. stock.
B. fixed-income security.
C. bond.
D. futures contract.
Answer: D
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Sammy has a drone that he values at $1,500. Dean values the same drone at $2,000. Sammy decides to sell the drone to Dean for $1,800. If the government imposes a $250 tax on the sale of drones,
A) Sammy and Dean would not be able to complete the transaction. B) Sammy and Dean would still be able to complete the transaction. C) the tax would cause a deadweight loss of $500. D) Both A and C are correct.
Which of the following is not correct about most economic models?
a. They are composed of equations and diagrams. b. They contribute very little to economists' understanding of the real world. c. They omit many features of the real-world economy. d. In constructing models, economists make assumptions.
Aggregate demand and supply curves have been widely used to analyze the performance of the macroeconomy. Figure 5-3 shows four diagrams that represent different changes in the macroeconomy. Choose the diagram that best represents the situations described in the following questions.Figure 5-3
Which graph in Figure 5-3 best represents the aggregate demand-induced Great Depression of the 1930s?
A. 1 B. 2 C. 3 D. 4
Suppose a person can play the lottery for $1.00. His chance of winning $25 million is 1 in 50 million. If there are no other costs or benefits involved, the logic of cost/benefit analysis says:
A. he should not play the lottery. B. he should play only if he does not have a self-control problem with gambling. C. he should play the lottery. D. there is not enough information to decide whether he should play.