Suppose that you are the president of a small printing company and you are considering the purchase of new machinery. What factors must you consider in making this decision?
What will be an ideal response?
You must first consider the expected flow of future productive services that the machinery will yield. The expected costs must be considered as well. These costs should include a look at the possible alternative uses of the funds required to purchase the machinery.
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List three characteristics of demand curves. Make sure to explain the shape of the curve and the meaning of the vertical and horizontal intercepts
What will be an ideal response?
The idea that because of scarcity, producing more of one good or service means producing less of another good or service refers to the economic concept of
A) trade-off. B) equity. C) efficiency. D) optimization.
One factor contributing to the decline in cost advantages that banks once had is the
A) decline in the importance of checkable deposits from over 60 percent of banks' liabilities to 2 percent today. B) decline in the importance of savings deposits from over 60 percent of banks' liabilities to under 15 percent today. C) decline in the importance of checkable deposits from over 40 percent of banks' liabilities to 15 percent today. D) decline in the importance of savings deposits from over 40 percent of banks' liabilities to under 20 percent today.
If an insurance company underestimates the number of high-cost customers, it is likely to face ________.
A) adverse selection B) the principal-agent problem C) moral hazard D) the bad apple problem