With one year of study, Rob Sanchez can earn a master's degree, which will cost him $15,000 in tuition and $20,000 in lost wages. The degree will increase his yearly income by $20,000 per year for three years after receiving the degree. The interest rate is 10 percent (0.10) per year. What should Rob do? (Assume that costs are incurred and income is received at the end of the year.)
a. he should obtain the degree because education always pays off
b. because the cost of tuition and lost wages ($35,000 . is less than the extra income ($60,000), he should obtain the degree
c. he should subtract the present value of tuition from the total present value of the additional income. If the number is positive, he should obtain the degree
d. he should subtract the total present value of the tuition and lost wages from the total present value of the additional income. If the number is positive, he should obtain the degree
e. he should subtract the present value of lost wages from the total present value of additional income. If the number is positive, he should obtain the degree
D
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The expectations theory
A) has difficulty explaining why U.S. Treasury securities have lower yields than corporate bonds. B) has difficulty explaining why yields on bonds of different maturities move together. C) has difficulty explaining why yield curves usually slope upward. D) accounts well for the fact that yield curves usually slope upward.
While economic regulation applies to ________ industries, social regulation applies to ________ firms
A) particular; individual B) particular; all C) all; individual D) utility; healthcare
Chrissy and Marvin are competitors in a local market and each is trying to decide if it is worthwhile to advertise. If both of them advertise, each will earn a profit of $10,000 . If neither of them advertise, each will earn a profit of $20,000 . If one advertises and the other doesn't, then the one who advertises will earn a profit of $30,000 and the other will earn $14,000 . To earn the highest
profit, Chrissy a. should advertise, and she will earn $10,000. b. should advertise, and she will earn $30,000. c. should not advertise, and she will earn 20,000. d. has no dominant strategy.
In the intermediate range the aggregate supply curve is
A. upward sloping. B. downward sloping. C. vertical. D. horizontal.