The relative income hypothesis is associated with the ideas of

Which of the following represents the equation that would be used to determine the yield to maturity of a corporate bond with a face value of $1000, price of $1100, coupon rate of 5%, and maturity in three years?

A) $1100 = $1500/(1 + i)3 B) $1100 = $500/(1 + i) + $500/(1 + i)2 + 1000/(1 + i)3 C) $1100 = $500/(1 + i) + $500/(1 + i)2 + 500/(1 + i)3 D) $1100 = $500/(1 + i) + $500/(1 + i)2 + 1500/(1 + i)3

In order to achieve social efficiency, the size of an effluent tax should be based on:

a. the external cost created by the pollutant. b. people's willingness to pay for a cleaner environment. c. the expense of installing new "green" equipment. d. the number of free riders in the industry.