Irving owns a chain of movie theaters. He is considering whether he should build a new theater downtown. The expected rate of return is 15 percent per year. He can borrow money at a 12 percent interest rate to finance the project. Should Irving proceed with this project?
What will be an ideal response?
yes
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If I = S, then
A) C + I = S + I. B) C + S = S + I. C) C + S = C + I. D) C - S = S - I.
Explain how the short-run supply curve of the competitive firm is derived.
What will be an ideal response?
Jennifer has just finished high school and is deciding whether to start working or go to college. She has already been offered a job that pays $35,000 a year. Four years of college will cost $12,000 each year. She would earn an extra $20,000 each year after she graduates for the 45 years she plans on working until she retires. Assume that the interest rate is 8.5%. What is Jennifer's opportunity cost of one year of college?
A. $12,000 B. $17,000 C. $35,000 D. $47,000
Are jobs the key to economic progress and the achievement of high income levels?
A) Yes, as long as people are working, income levels will be high. B) Uncertain, jobs are the key for a market economy, but they are less important for a centrally planned economy. C) Yes, when full employment is present, the income levels of the residents will be at their maximum. D) No, the people must be employed in jobs where they are producing goods and services that are valued highly relative to cost.