Table 10.1 shows the cash flows and discounted cash flows for three mutually exclusive projects available to a company. Assume an interest rate of 5%. Which project should the company choose if they want to recover their initial investment as soon as possible?
A. Project A
B. Project B
C. Project C
D. It cannot be determined from the information given.
A. Project A
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Which of the following statements regarding the long-term equilibrium is TRUE?
A) As new firms enter a market, each existing firm increases the quantity it produces. B) Firms leave a market if they are making zero economic profit. C) Entry and exit stop when firms are making an economic profit. D) Entry and exit stop when firms make zero economic profit.
Which factors explain labor productivity?
A) diminishing returns; the quantity of labor per hour worked B) diminishing returns; the quantity of capital per hour worked C) technological change; the quantity of capital per hour worked D) technological change; the quantity of labor per hour worked
In a game of bargaining, the player who is willing to:
A. be cooperative has more bargaining power and so receives a worse payoff. B. hold out longer has more bargaining power and so receives a worse payoff. C. hold out longer has more bargaining power and so receives a better payoff. D. make the first move has more bargaining power and so receives a better payoff.
Deflation
a. reflects falling price levels b. was prevalent during the oil shocks of the 1970s c. under the current trends will cause consumers' purchasing power to shrink d. has been persistent in the U.S. economy since the Great Depression e. is the same as stagflation