Stockholders normally obtain higher expected payments than bondholders because
A. they are required by law to obtain a higher return.
B. they face higher risk.
C. the profit share declared as stock dividends is not taxable.
D. they vote themselves higher returns.
Answer: B
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The equilibrium wage in a local labor market is $10 per hour. If a minimum wage of $15 per hour is imposed, which of the following will occur?
A) There will be a decrease in the quantity of labor supplied by households. B) There will be an increase in unemployment. C) There will be an increase in the quantity of labor demanded by firms. D) All of the above will occur.
Jeremy maximizes utility by consuming both iced tea and coffee. Iced tea is priced at $1.50 per bottle and coffee at $2.00 per 16-ounce cup. Which of the following marginal utility pairs is inconsistent with Jeremy's consumer equilibrium at these prices?
a. MU of iced tea = 3; MU of coffee = 4 b. MU of iced tea = 4; MU of coffee = 3 c. MU of iced tea = 6; MU of coffee = 8 d. MU of iced tea = 3/4; MU of coffee = 1