Other things equal, a person with a cosmetician's certificate from a vocational school will earn $4,000 more per year than a person without one, starting the year the certificate is received. But after 6 years, the difference in income will disappear because styles have changed. If the interest rate is 5 percent (0.05) per year, what is the present value of having just received a certificate?
(Assume that each year's income is received at the end of the year.)
a. $21,317.91
b. $24,000.00
c. $22,857.14
d. $19,379.92
e. It depends on the cost of acquiring the certificate
A
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Your neighbor likes to blast 1970's rock music and the louder the better. The loud music imposes a cost on you because it disrupts your study of economics. Let D stand for the volume of his music in decibels, B for his benefits and C for your costs, where B and C are measured in dollars. For any given volume, D, your neighbor's benefit is B = 0.63D - 0.002D2 and your cost is C = 0.06D + 0.001D2. What is the efficient Pigouvian tax?
A. $0.75 per decibel B. $0.29 per decibel C. $0.24 per decibel D. $0.25 per decibel
The type of policy that involves interest rates and the availability of loanable funds is known as:
A) fiscal policy. B) monetary policy. C) strategic financial policy. D) federal policy.
Under Section 2 of the Sherman Act,
a. firms cannot act in ways that increase prices b. contracts between parties are deemed binding c. firms cannot operate in perfectly competitive markets d. firms that earn short-run profits face penalties e. a firm cannot attempt to monopolize an industry
An inward shift of the demand curve for a product causes outward shifts in the demand curves for all the factors used to produce the product.
Answer the following statement true (T) or false (F)