Financial disintermediation occurs when:
a. Businesses no longer borrow directly in the bond market.
b. Businesses no longer issue stock.
c. Individuals no longer trade securities in the secondary market.
d. Individuals withdraw funds from financial intermediaries and invest them elsewhere.
e. All of the above.
.D
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Suppose firms A and B each make T-shirts. Firm A's production function is q = L0.5 K0.5. Firm B's production function is q = 1.2 ? L0.5 K0.5
If the two firms each hire the same amounts of capital and labor, compare the two firms in terms of APL and MPL.
A patent on a product gives a firm
A) protection from having the invention copied or stolen for a period of 20 years. B) economies of scale in producing the product. C) excessive profits in the long run. D) the power to impose a tariff on a competing product.