1.2. In most of your financial decisions early in life, you'll be a buyer, but let's think...

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1.2. In most of your financial decisions early in life, you'll be a buyer, but let's think about the incentives of people who sell stocks, bonds, bank accounts, and other financial products.

a. Walking in the shopping mall one day, you see a new store: the Dollar Store. Of course, you've seen plenty of dollar stores before, but none like this one: The sign in the window says, "Dollars for ale: Fifty cents each." Why will this tore be out ofbusines soon?

b. If busine s owners are self-interested and fairly rational people, will they ever open up this dollar tore in the first place? Why or why not?

c. This dollar store is imilar to tories people tell about "cheap stocks" that you might hear of on the news. Fill in the blank with any prices that make sense: "If the shares of this com pany were really worth _____ , no one would really sell it for _ _ __ _

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Modern Principles Microeconomics

ISBN: 9781429239998

2nd Edition

Authors: Tyler Cowen, Alex Tabarrok

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