Other things being equal, when average productivity falls:
A. average fixed cost must rise.
B. marginal cost must rise.
C. average variable cost must rise.
D. average total cost must rise.
Answer: C
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To the corporation, bonds are riskier than stocks because
A. interest rates fluctuate. B. bond interest requires that firms make a fixed payment. C. investors prefer stocks to bonds. D. speculators manipulate bonds more than stocks.
Capital formation in the colonies was mostly due to
a. savings and investments from the colonists themselves. b. capital inflows from English merchants. c. capital inflows from the English crown. d. capital inflows from international sources other than England.
Apply the definition of risk provided in the textbook to an individual's decision to purchase a car insurance policy. Suppose that the individual has two possibilities: no accident ($0 gain/loss) and accident (-$30,000 loss). If the probability of an accident is lower than the probability of an accident occurring (say the probability of an accident is 10%), then why do people buy car insurance? How is this related to the concept of value at risk and the time horizon of investment decisions?
What will be an ideal response?
(Consider This) Subsidies to encourage hospitals and physicians to adopt electronic medical records have resulted in which of the following?
A. Improved care for a greater number of patients because of the efficiency gains. B. Reduced health care costs because of the efficiency gains in record-keeping. C. More patients seen but at a higher cost because of the high fixed cost of the recording devices. D. Less care at higher costs as the extensive record-keeping process reduces efficiency.