An example of an activity that is likely to generate benefit (positive) externality is A) a well manicured lawn of your neighbor. B) growing wild flowers on city street islands. C) fireworks on the 4th of July. D) an educated workforce. E) All of the above ANSWER E
Date: September 9th, 2020
A merger between two companies in unrelated fields of business A) will always lead to economies of scale. B) will generally increase the value of the unified firm compared to the value of the two companies before the merger because of the benefits of diversification. C) may not have any synergistic effects. D) will necessarily […]
Date: September 9th, 2020
The supply for products that exhibit cost externalities is generally ________ the supply for products that do not. A) greater than B) less than C) the same as D) greater or less (depending on the market) than ANSWER A
Date: September 9th, 2020
If getting accepted into college is very difficult because of high standards of intelligence and ability, but students learn absolutely nothing while in college, it is most likely that A) they will not be hired upon graduation. B) attendance sends a signal to employers regarding ability. C) nobody will want to go to college. D) […]
Date: September 9th, 2020
Which of the following is not considered a rationale for the intervention of government in the market process in the United States? A) the redistribution of income B) the reallocation of resources C) the long-run planning of scarce resources D) the short-run stabilization of prices E) All of the above ANSWER C
Date: September 9th, 2020
Savings accounts pay very low rates of interest. The average return on the stock market is about 10-12%, in the long run. Why would anyone put money into a savings account? What will be an ideal response? ANSWER The stock market gives a higher return for higher risk. Particularly if you are very averse […]
Date: September 9th, 2020
If an Albanian company hires a U.S.-based law firm, it is A) insourcing, from a U.S.-perspective. B) using domestic outsourcing. C) changing into a multinational enterprise. D) vertically integrating. ANSWER A
Date: September 9th, 2020
Which of the following is the best example of a product or service that provides a benefit externality? A) the construction of a private road that allows vehicles if a toll is paid B) a public library C) a bookstore that is open to everyone D) All of the above E) None of the above […]
Date: September 9th, 2020
All firms in a competitive industry have the following long-run total cost curve: C(q) = q3 10q2 + 36q where q is the output of the firm. a. Compute the long run equilibrium price. What does the long-run supply curve look like if this is a constant cost industry? Explain. b. Suppose the market […]
Date: September 9th, 2020
A two-period project has the following probabilities and cash flows: Probability Cash flow Period 1: .25 500 .50 600 .25 700 Period 2: .30 300 .50 500 .20 700 The discount rate is 7%, and the initial investment is $1,000. How much is the expected NPV of this project? ANSWER ($20.00)
Date: September 9th, 2020
