A Buyer of a Futures Contract

question 17

Multiple Choice

A buyer of a futures contract:

• A) may let the contract expire with no action required
• B) has an obligation to buy the underlying asset
• C) has a right, but not an obligation, to buy the underlying asset
• D) must pay the futures price when the contract is made

Understand and calculate government revenue generated from tariffs and quotas.

Analyze the impact of international trade policies on domestic markets.

Apply economic theory to real-world events such as natural disasters and policy proposals.

Understand the roles and responsibilities of a paralegal in the client interview process.

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Definitions:

Short-run Marginal Cost Curve

A curve that shows the change in total cost associated with producing one more unit of output in the short term.

Diminishing Marginal Returns

A principle that states as additional units of a variable input are added to fixed inputs, the additional output produced from each new unit eventually decreases.

Variable Resources

Inputs that change in quantity with levels of production, such as raw materials and labor.

Variable Cost

Costs that change in proportion to the level of goods or services that a business produces.