Which of the following has a production process that would be considered labor intensive?
A. Hairstyling services
B. Farming in a rich country
C. T-shirt production
D. Road construction.
A. Hairstyling services
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When nations trade, it:
A. only benefits the stronger nation. B. only benefits the weaker nation. C. can benefit all nations involved. D. can only benefit one nation, but we cannot say whichnation without more information.
There are two existing firms in the market for computer chips. Firm A knows how to reduce the production costs for the chip and is considering whether to adopt the innovation or not. Innovation incurs a fixed setup cost of C, while increasing the revenue. However, once the new technology is adopted, another firm, B, can adopt it with a smaller setup cost of C/3. If A innovates and B does not, A earns $30 in revenue while B earns $10. If A innovates and B does likewise, both firms earn $20 in revenue. If neither firm innovates, both earn $10. Under what condition will firm A innovate?
A. C > 30 B. C < 30 C. 35 > C > 25 D. 10 > C > 0
Everything else remaining unchanged, the effect of domestic spending shocks on a country with a floating exchange rate differs depending on
A. the mobility of capital across countries. B. the interest rate differential between the country and its trading partners. C. the change in the domestic price level in the short run. D. the current trade balance situation of the country.
Sail with Us is considering a three-year advertising campaign. The campaign will cost $100,000 at the end of each of the three years. The managers of Sail with Us have estimated that the campaign will generate $80,000 a year in additional profit for the next five years. If the discount rate is 2 percent, what is the net present value of the advertising campaign?
A) $90,213 B) $95,228 C) $78,569 D) $88,68