As an alternative to selling shares of stock as a means of raising funds, a large company could, instead,
a. invest in physical capital.
b. use equity finance.
c. sell bonds.
d. purchase bonds.
c
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In the context of the production possibilities curve, opportunity cost is measured in:
a. dollars paid for the goods. b. the quantity of other goods given up. c. the value of the resources used. d. changing technology. e. units of satisfaction.
The giving up of a good or activity in order to obtain some other good or activity is called:
a. a tradeoff. b. a cost analysis. c. a random choice. d. an opportunity cost. e. a sunk cost.
Which of the following statements about incentives is true?
a. Changing one incentive can result in several unseen effects. b. Understanding how people respond to incentives helps government planners organize the economy. c. Fair-minded people who care about others will not be affected by incentives. d. Emphasizing incentives ignores altruistic nonmonetary values.
Consider a perpetual bond that pays $200 per year to its owner. By how much would the price of this bond fall if the interest rate rose from 0.04 to 0.05?
A. $1,000 B. $2,000 C. $4,000 D. $500