Which of the following statements is correct?
a. A corporation receives a monetary payment every time its shares of stock are traded by stockholders on organized stock exchanges.
b. When a corporation sells bonds as a means of raising funds it is engaging in debt finance.
c. A share of stock is an IOU.
d. The two most important financial markets in the economy are the stock market and financial intermediaries.
b
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To achieve allocative efficiency, one must compare the
A) marginal cost of a good to its opportunity cost. B) opportunity cost to the attainable point on the production possibilities frontier. C) marginal benefit of a good to its marginal cost. D) marginal cost to the production efficiency cost. E) point of production efficiency to the point of allocative efficiency.
A dieter who prefers to eat small portions at his next meal, but chooses a large portion at mealtime when it arrives is:
A. dynamically consistent. B. statically consistent. C. exhibiting a present bias. D. exhibiting a substitution bias.
Suppose that in 2012 ABC Corp. produced 500 million units of a good at an average cost of $2, and in 2013 ABC Corp. expanded its plant capacity and produced 600 million units at an average cost of $1.80. In this range, one can conclude that ABC Corp. is experiencing:
A. economies of scale. B. diseconomies of scale. C. neither economies of scale nor diseconomies of scale. D. diminishing marginal product.
If the consumption function is of the form [C = 60 + 0.9Y], the MPS equals
A. -0.9. B. 0.1. C. 0.6. D. 0.9.