Determining whether the income distribution accurately reflects performance ability is possible, although difficult. Indicate whether the statement is true or false ANSWER F
Date: September 9th, 2020
We infer the distribution of income from the distribution of abilities. Indicate whether the statement is true or false ANSWER F
Date: September 9th, 2020
Does it make sense to consider the returns to scale of a production function in the short run? A) Yes, this is an important short-run characteristic of production functions. B) Yes, returns to scale determine the diminishing marginal returns of the inputs. C) No, returns to scale is a property of the consumer’s utility function. […]
Date: September 9th, 2020
An asset’s beta can be used to compute its discount rate for an NPV calculation because the discount rate is equal to A) rf + b(rm + rf). B) rf – b(rm + rf). C) rf – b(rm – rf). D) rf + b(rm – rf). E) beta itself. ANSWER D
Date: September 9th, 2020
What kind of game is shown in Scenario 13.13? A) Battle of the Sexes. B) Matching Pennies. C) Prisoners’ Dilemma. D) The Product Choice game. E) It is not possible to tell what kind of game it is because the strategies have not been identified. ANSWER D
Date: September 9th, 2020
Refer to Scenario 17.5. If low effort is exerted, expected income is A) $5000. B) $5500. C) $6000. D) $6500. E) $7000. ANSWER B
Date: September 9th, 2020
Consider the following statements when answering this question I. If the cost of producing each unit of output falls $5, then the short-run market price falls $5. II. If the cost of producing each unit of output falls $5, then the long-run market price falls $5. A) I and II are true. B) I is […]
Date: September 9th, 2020
The principal-agent problem of ownership vs. control of the corporation tends to get worse when A) stock in a corporation is held exclusively by a small number of people who control the company’s day-to-day operations. B) stock in the company is tightly held, but there are some “outsider” stockholders. C) stock in the company is […]
Date: September 9th, 2020
If the rate of return on the stock market is rm and the rate of return on a risk-free asset is rf, then A) rm – rf measures the risk, all of it nondiversifiable, one has to accept in the stock market. B) rm – rf measures the risk, all of it diversifiable, one has […]
Date: September 9th, 2020
Less than 50% of two-parent poor families have income from earnings. Indicate whether the statement is true or false ANSWER F
Date: September 9th, 2020
