The price elasticity of demand is
A) always positive, so there is no reason to consider the absolute value of the price elasticity of demand.
B) always negative, but by convention, economists typically express the price elasticity of demand as an absolute value.
C) always equal to -1, which by convention economists typically express as an absolute value, or 1.
D) always equal to zero, so there is no reason to consider the absolute value of the price elasticity of demand.
Answer: B
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The above figure shows the short-run production function for Albert's Pretzels. The marginal productivity of labor equals the average productivity of labor
A) for all levels of labor. B) at none of the levels of labor. C) only for the first worker. D) only for the fifth worker.
In the short run, a constant (as a percentage of profits) corporate income tax imposed on a monopolist will _____
a. cause capital to flee the industry b. cause output to fall c. leave output unchanged d. cause output to rise
You manage a new product development team for an electronics manufacturer, and your firm's policy is that all new projects must pay for themselves in the first five years
Your team has projected that the first year of the project requires an initial investment of $2 million with no revenue, the second year loss is $500,000, the net revenue for year 3 is zero, and you earn $1.8 million in both year 4 and year 5. If the opportunity cost of capital for your firm is 8%, should you go ahead with this project? A) No, the expected NPV is negative B) Yes, the expected NPV is roughly $290,000 C) Yes, the expected NPV is $1.1 million D) We do not have enough information to answer this question.
An "originate-to-distribute" strategy means:
a. Mortgage originators make loans with the intention of having investors purchase and hold them. b. Mortgage originators make loans with the intention of keeping these assets on their balance sheets. c.Innovative mortgage loans are more likely to be sold and distributed to investors' than standard, run-of-the-mill mortgage loans. d. Originating loans is a lengthy process that requires originators to hold mortgages for longer periods than they want. Therefore, a strategy is needed for to distribute these loans as soon as the holding period is done.