If the interest rate were 5 percent, how much would people be willing to pay for a stock that was certain to yield a $10 per share stream of net earnings continuously in the future?
a. $10
b. $20
c. $200
d. $400
e. $2,000
C
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In the above figure, the firm is incurring an economic loss at
A) point a. B) point c. C) points b and d. D) points a, b, and d.
The present value of $300 received 5 years in the future would be calculated as which of the following when the interest rate is 5%?
A) 300/(1.5)5 B) 5.05/300 C) 300/(1.05)5 D) 300 × 1.5 × 5
When the price of a good or service changes a. the supply curve shifts in the opposite direction. b. the demand curve shifts in the opposite direction. c. the demand curve shifts in the same direction
d. there is a movement along a given demand curve.
Which of the following is most likely to lead to an increase in the rental price of apartments near your campus?
a. lower property taxes on apartment buildings b. an unexpected increase in enrollment at your college c. lower prices for the bricks used in the construction of apartments d. the building of a new large dormitory on the college campus