chapter 19-21

The financial product that does not publish its value until the end of the trading day is a;

mutual fund

The investment that most probably does not carry a federal tax liability is the;

municipal bond

Under the "rule of 70" at an interest rate of 2% it would take

35

The effect of a price movement along the demand curve can best be depicted by the;

elasticity of demand

The point of intersection between the indifference curve and budget line is;

the probable price consumer will pay

If the percent change in quantity demanded is less than the percent change in price the product is

inelastic

Two products that are close substitutes will probably have a cross elasticity of demand that is;

elastic

The top of the candle wick DOES NOT represent

the opening or closing price or the daily volume

Common stocks are

A certificate of ownership, have limited liability, and are primarily purchased for financial gain

If you were looking to purchase a call option on a listed companies stock it would probably be traded on the

CBOE

A perfectly elastic supply curve is;

horizontal

For a firm to maximize its revenue elasticity must be;

unitary

According to the author the only product that is elastic in the short run would be

restaurant meals

The elasticity of demand is found by using the formula;

% change in the quantity demanded of good A + % change in the price of good B

What determines our choice of products;

our rational behavior, our preferences, budget constraints

A green candle indicates that a stock has closed lower than its opening price at the end of the trading day

false

If Tom Brady's salary is 10 times more than other NFL quarterbacks then his economic profit is that excess over the norm

true

The nominal rate of interest is adiusted for inflation

false

A credit rating of BBB or above is considered investment grade

true

All common stocks pay dividends

false

A firm's financial profit or loss will be the same number as the economic profit

false

NYSE was the first online platform for trading stocks

false

The size of the wick on the trading candle may indicate future trading

true

Where the indifference curve intersects the budget line between two product choices is probably where the consumer will buy both products

true

When elasticity is equal to 1.0 the demand for the product is always inelastic

false

An elastic demand curve means that a change in price has resulted in a noticeable change in quantity

true

Total Utility is the measure of the extra utility we receive from one additional unit of a product

false

Budget constraints play a key role in the decision to buy or not to buy a
Particular good

true

Perfect substitutes mean that consumers will choose equal quantities of both given the lack of income constraints

true

A linear demand curve will always be elastic at some point and inelastic at some other point

true