What are the three key features of the financial system that result from the existence of transactions and information costs?
What will be an ideal response?
First, loans from financial intermediaries are the most important external source of funds for small- to medium-sized firms. Second, the stock market is a less important source of external funds to corporations than is the bond market. Third, debt contracts usually require collateral or restrictive covenants.
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Refer to Table 3-4. The table above shows the demand schedules for cashews of two individuals (Jordy and Amy) and the rest of the market. At a price of $6, the quantity demanded in the market would be
A) 87 lbs. B) 95 lbs. C) 103 lbs D) 215 lbs.
Price elasticity of demand is defined as
a. the percentage change in price divided by the percentage change in quantity demanded b. the percentage change in quantity demanded divided by the percentage change in price c. the change in quantity demanded divided by the change in price d. the change in price divided by the change in quantity demanded e. the quantity demanded divided by the price