Suppose you plan to hold a stock for one year. You expect that, in one year, it will sell for $30 and pay a dividend of $3 per share. If your required return on equity is 10%, what is the most you should be willing to pay for the share today?
A) $3.30
B) $23
C) $30
D) $33
C
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Refer to Figure 2-8. If Vidalia chooses to produce 80 dozen roses, how many orchids can it produce to maximize production?
A) 24 dozen orchids B) 48 dozen orchids C) 60 dozen orchids D) 74 dozen orchids
MNO Limited publishes a magazine targeted at urban professionals who live on the east and west coasts of the U.S., and all of the magazines are printed at a marginal cost of $0.50 per copy at a publishing plant in Kansas
If the East Coast elasticity of demand for the magazine is -1.25 and the West Coast elasticity of demand is -1.50, what prices should MNO Limited charge for the magazines in these two markets in order to maximize profits? A) Price should be $0.50 in both markets B) Price should be $2.50 on the West Coast and $1.50 on the East Coast C) Price should be $1.50 on the West Coast and $2.50 on the East Coast D) Price should be $0.40 on the West Coast and $0.33 on the East Coast
If demand were inelastic, then we should immediately:
a. cut the price. b. keep the price where it is. c. go to the Nobel Prize Committee to show we were the first to find an upward sloping demand curve. d. stop selling it since it is inelastic. e. raise the price.
Government rules and regulations can, at times,
A) improve the function of property rights. B) limit free-riders. C) reduce negative externalities. D) all of these choices.