Sharon buys some common stock in 1990 for $10,000 and sells it in 2000 for $15,000 . During the same period, prices have risen by 75 percent. The net result of Sharon's stock purchases is that she will
a. pay no taxes because she earned negative real capital gains.
b. lose purchasing power and have to pay taxes anyway.
c. earn a real capital gain of $5,000 plus 75 percent.
d. earn a real capital gain of $15,000 minus 75 percent.
b
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In the linear breakeven model, the breakeven sales volume (in dollars) can be found by multiplying the breakeven sales volume (in units) by:
a. one minus the variable cost ratio b. contribution margin per unit c. selling price per unit d. standard deviation of unit sales e. none of the above
Neoclassical economists hold that, based on the theory of rational _______________, economic adjustments may happen very quickly.
a. thought b. production c. expectations d. thinking
Suppose the interest rate is 4 percent. Which of the following has the greatest present value?
a. $100 today plus $190 one year from today b. $150 today plus $140 one year from today c. $200 today plus $90 one year from today d. $250 today plus $40 one year from today
Suppose that last year the Tulane University men's basketball team, the Green Wave, won the NCAA tournament. As a result, attendance at Green Wave basketball games has increased dramatically. Explain the difference between the supply of seats for Green Wave games in the short-run and in the long-run. How would you describe the elasticity of supply of seats in the long-run?
What will be an ideal response?