The amount to which some current amount of money will grow as interest compounds over time is known as:
A. the future value of that sum of money.
B. the present value of that sum of money.
C. compound interest.
D. the time-value of money.
Answer: A
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Assume that several firms compete in the market for cellular phones and that the price elasticity for this industry is equal to 0.75. Based on this information, would you advise a firm in this industry to increase its price? If so, what is the percentage loss in total sales this firm should expect to experience?
A. Definitely no. Each 1 percent increase in price would result in 7.5 percent reduction in total sales, negatively affecting total revenues. B. Definitely yes. Total revenues would increase as sales would decrease by only .75 percent for each 1 percent increase in price. C. Not enough information is provided to make a sound decision. For the same reason, it is not possible to predict what the loss in sales for one firm would be. D. Definitely no. Each 1 percent increase in price would result in 7.5 percent reduction in total sales, affecting total revenues positively.
Related to the Economics in Practice on p. 525: If the estate in the Chekhov play Uncle Vanya is earning 2 percent and a less risky investment is also earning 2 percent, the price of the estate would ________ to make the two investments financially equivalent.
A. have to rise B. have to not change, since the return on investment is the same C. have to fall D. none of the above
If a firm's total costs are $75 when it produces 10 units of output and $80 when it produces 11 units of output, then the marginal cost of producing the 11th unit is
A. $1. B. $5. C. $8.09. D. $10.
Why did the Kyoto Protocol have only a small impact on overall global greenhouse-gas emissions? Which two countries missed their targets by the largest amounts?
What will be an ideal response?