All else equal, if the interest rate is 5%, what is the PDV of a lottery prize that pays $1,000,000 today and $1,000,000 each year for the next 19 years?
A. $10,500,000
B. $12,462,210
C. $13,085,321
D. $20,000,000
C. $13,085,321
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When every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it, ________ occurs
A) efficient central planning B) equity C) productive efficiency D) allocative efficiency
Which of the following statements is TRUE about the economic profits earned by a monopolistic competitor firm in the long run?
A) Economic profits can be positive since firms have some degree of monopoly power. B) Economic profits will be positive since the firm has a downward sloping demand curve. C) Economic profits will tend towards zero since positive profits will attract new firms into the industry. D) Economic profits can be negative since there is so much competition in the market.
The vertical intercept of the consumption function measures autonomous consumption. It represents the combined impact on consumption spending of all factors other than disposable income
a. True b. False
Monopolistically competitive markets may be socially inefficient because
a. most firms produce inferior products. b. government programs cannot effectively regulate price. c. firms earn zero economic profit. d. the market may have too much or too little entry by new firms.