Answer the following statement(s) true (T) or false (F)
1. The future value (FV) of a dollar is its present value (PV) plus the opportunity cost of not using that dollar in the present period.
2. The term, 1/(1 + r)t is known as the discount rate, where r represents the discount factor.
3. Present value determination is a procedure that corrects a value for the rate of inflation.
4. The discount rate used for public policy decision making is called the social discount rate.
5. Deflating refers to the process of converting a real value into its nominal value.
1. True
2. False
3. False
4. True
5. False
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When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market
a. It is appropriate to ignore that the market price includes a margin above marginal cost b. It is OK if the product on the market includes costly features your downstream division does not use c. Consider whether the product on the market is inexpensive because its quality is lower than you use d. if it is similar enough, it is justification for you producing it in-house
For any competitive labor market, changes that decrease the number of workers will:
A. decrease the labor supply and shift the supply curve left. B. increase the labor supply and shift the supply curve right. C. decrease the labor supply and shift the supply curve right. D. increase the labor supply and shift the supply curve left.
The average benefit of n units of an activity is the:
A. total benefit of n units divided by n. B. extra benefit from carrying out one additional unit of the activity. C. n times the total benefit of n units. D. n divided by the total benefit of n units.
If a firm is experiencing _____________________, then as the quantity of output rises, the average cost of production rises.
a. decreasing returns to scale b. consent returns to scale c. economies of scale d. increasing returns to scale