Suppose the interest rate is 7 percent. Consider four payment options: Option A: $500 today. Option B: $550 one year from today. Option C: $575 two years from today. Option D: $600 three years from today. Which of the payments has the highest present value today?
a. Option A
b. Option B
c. Option C
d. Option D
b
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A residual demand curve:
A. shows the relationship between the market price and the quantity demanded by consumers at each price. B. shows the relationship between a firm's output and the market price given the prices charged by the firm's rivals. C. shows the relationship between a firm's output and the market price given the outputs of the firm's rivals. D. shows the remaining demand for a good after a firm's rivals have sold their output.
International capital flows in an open economy have the effect of
a. increasing the power of fiscal policy. b. reducing the power of fiscal policy. c. reducing the power of fiscal policy in an expansion, and increasing it in a contraction. d. increasing the power of fiscal policy in an expansion, and reducing it in a contraction.
Answer the following statement true (T) or false (F)
1) Repeated games may involve either simultaneous or sequential decision making. 2) Negative-sum games do not exist because neither player has an incentive to play the game. 3) In a zero-sum game, the gains by one player will be exactly offset by the losses of the other. 4) In repeated games, players may be willing to accept lower payoffs in the short run in exchange for greater net payoffs over the long run. 5) In repeated games, credible threats are necessary for the players to reach a Nash equilibrium.
On a linear demand curve, demand is ________ at large quantities than it is at the middle of the demand curve.
A. more elastic B. less elastic C. equally elastic D. There is insufficient information in the question.