The value of an investment in an index fund depends on
A. the earnings estimate for the major index constituent.
B. the average performance of all mutual funds.
C. what happens to the prices of all stocks in that index.
D. the specific stock selection practices employed by the fund manager.
Answer: C
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If marginal cost is rising, what must be happening?
a. Average variable cost must be falling. b. Marginal product must be falling. c. Marginal product must be rising. d. Average fixed cost must be rising.
Economic incentives are designed to make individual self-interest coincide with social interest. According to economists, which of the following methods of pollution control best uses economic incentives to reduce pollution?
A) imposing quantitative limits on the amount of pollution and imposing a penalty for non-compliance with these limits B) rewarding environmental groups for monitoring the activities of private firms that produce products which generate pollution C) requiring the installation of specific pollution control devices D) instituting a system of tradable emission allowances