A cloth manufacturing firm is deciding whether or not to invest in new machinery. The machinery costs $45,000 and is expected to increase cash flows in the first year by $25,000 and in the second year by $30,000 . The firm's current fixed costs are $9,000 and current marginal costs are $15 . The firm currently charges $18 per unit. If the interest rate is 5% then the present value of the cash flows is
a. $6,020.41
b. $51,020.41
c. -$7,380.95
d. $10,000
b
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For baseball card collectors, Babe Ruth baseball cards from 1927 would most likely have a perfectly
A) inelastic demand. B) inelastic supply. C) elastic demand. D) elastic supply.
Which of the following describes a difference between the marginal revenue and demand curves of a perfectly competitive firm and a monopolistically competitive firm?
A) The marginal revenue curve of a monopolistically competitive firm lies below its demand curve; the marginal revenue curve of a perfectly competitive firm lies above its demand curve. B) The perfectly competitive firm's marginal revenue and demand curves are the same; the marginal revenue curve of a monopolistically competitive firm lies below its demand curve. C) The monopolistically competitive firm's marginal revenue and demand curves are the same; the marginal revenue curve of a perfectly competitive firm lies below its demand curve. D) The perfectly competitive firm's marginal revenue and demand curves are the same; the marginal revenue curve of a monopolistically competitive firm lies above its demand curve.
Most modern financial centers use computers to match buyers and sellers. This absence of personal contact contradicts the definition of a market
Indicate whether the statement is true or false
The principle of comparative advantage helps explain trade between nations
a. True b. False Indicate whether the statement is true or false