If the optimal forecast of the return on a security exceeds the equilibrium return, then
A) the market is inefficient.
B) no unexploited profit opportunities exist.
C) the market is in equilibrium.
D) the market is myopic.
A
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Bill is a high-school dropout who lost his job in a fast food restaurant when the economy plunged into a recession. After 8 months, Bill is still looking for work. He is an example of
A) frictional unemployment. B) structural unemployment. C) cyclical unemployment. D) the natural unemployment rate.
If firms in a monopolistically competitive industry are operating with positive economic profit, over time we would see
A) firms alter their advertising rates until they made at least normal profits. B) some firms entering the industry, causing the market supply curve to shift to the right, lowering price. C) some firms entering the industry, causing the demand curves of the existing firms to shift to the left. D) some firms entering the industry, causing the demand curves of the existing firms to shift to the right.