A one-year bond currently pays 5% interest. It's expected that it will pay 4.5% next year and 4% the following year. The two-year term premium is 0.2% while the three-year term premium is 0.35%

Homer and Teddy are stranded on a desert island. To feed themselves each day they can either catch fish or pick fruit. In a day, Teddy could pick 60 pieces of fruit or catch 20 fish. Homer could pick 100 pieces of fruit or catch 150 fish

Which of the following is CORRECT? A) Homer has a comparative advantage in catching fish and Teddy has a comparative advantage in picking fruit. B) Homer has a comparative advantage in picking fruit and Teddy has a comparative advantage in catching fish. C) Homer has a comparative advantage in both catching fish and picking fruit. D) Teddy has a comparative advantage in both catching fish and picking fruit.

Suppose duopolists face the market inverse demand curve P = 100 - Q, Q = q1 + q2, and both firms have a constant marginal cost of 10 and no fixed costs. If firm 1 is a Stackelberg leader and firm 2's best response function is q2 = (100 - q1)/2, at the Nash-Stackelberg equilibrium firm 1's profit is

A) 400. B) 650. C) 800. D) 1200.