When the coupon rate on newly issued bonds increases relative to older, outstanding bonds, what happens?
A) The market price of the older bond falls in the secondary market.
B) The market price of the older bond rises in the secondary market.
C) Older bonds will sell for more than their face value.
D) Older bonds can still be sold at their face value.
A
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A farm is able to produce 5,000 bushels of peaches per season on 100 acres. Assume it adds one more acre and is able to produce 6,000 bushels per season. The marginal product of the additional acre of land for this farm is:
a. 6,000 bushels per acre per year. b. 5,000 bushels per acre per year. c. 1,000 bushels per acre per year. d. 11,000 bushels per acre per year.
Because of scarcity, rationing is
A) unimportant because people get what they want. B) necessary because people cannot get everything they want. C) unimportant because prices clear markets. D) not a problem because governments can determine what everybody wants.