A pizza shop owner needs to buy a new pizza oven and he is trying to decide between two different used ones. Whichever oven he buys, it will generate $3,000 net revenue per year. The older use oven has a useful life of only 2 years and the newer oven has a useful life of 4 years. If the interest rate is 8% per year, what is the difference in value between the two ovens? (Assume that each year's
revenue is received at the end of the year.)
a. $4,586.58
b. $5,349.79
c. $2,205.09
d. $2,777.78
e. $3,000
A
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If the demand for gasoline becomes more elastic over time,
A. the demand curve will shift out. B. the demand curve will become flatter. C. other things being equal, the equilibrium price of gasoline must fall. D. other things being equal, the equilibrium quantity of gasoline must fall.
Games with a negative-negative outcome:
A. must have a noncooperative equilibrium. B. result from players acting in their own self-interest. C. are not necessarily the best outcome for the players involved. D. All of these statements are true.
Costs of production that do not change with the rate of output are:
a) Nonexistent. b) Marginal costs. c) Variable costs. d) Fixed costs.
With the help of a suitable diagram, explain how in a two-country, two-commodity model one of the countries may fail to specialize completely despite enjoying comparative advantage in one of the goods.
What will be an ideal response?