If you pay a premium of 10 cents per bushel for a Corn put option with a strike price of $6.60, what's the most you can lose?

Suppose the Fed wants to fix the U.S. dollar/Mexican peso rate at 11 pesos per dollar under a fixed exchange rate policy. If the exchange rate falls to 10 pesos per dollar, the Fed can

A) buy dollars. B) sell dollars. C) attempt to freeze all sales of dollars. D) any of the above actions could take place.

Which of the following offers theories to explain why the government, like the private sector, may also "fail"?

a. Social economics. b. Public choice theory. c. Rational expectations theory. d. Keynesian economics.