Which of the following statements about the financial and real sectors is true?
A. For every real asset there is a financial asset.
B. For every financial asset there is a real asset.
C. For every real transaction there is a financial transaction.
D. For every financial transaction there is a real transaction.
Answer: C
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As demonstrated by the labor supply schedule, the quantity of labor supplied depends on
A) workers' productivity. B) the value of the dollar. C) the nominal wage. D) the amount of labor that firms want to hire. E) the real wage.
The owners of sports franchises often complain that free-agency (open bidding for player services) threatens their profitability and thus their long-run viability. Given your knowledge of perfect competition, which of the following is correct?
A) Team owners might be correct in as much as free-agency bids up the price of players so that economic profits from those players equal zero. B) Team owners might be correct in as much as free-agency bids up the price of players so that economic profits from those players is negative. C) Team owners are lying, as free-agent salaries are still much too low. D) Team owners are telling the truth, as free-agent salaries are much too high.