Answer the following statements true (T) or false (F)
1) The annual interest rate that is used to calculate the discount factor is called the discount rate.
2) The longer the period of time until receiving a future amount of money, the more interest that can be earned, so the larger the discount factor.
3) All else equal, the present value of a sum of money will be smaller the larger the interest rate.
4) An annuity factor can be used when payments change each year.
5) All else equal, when a manager is choosing between two payment plans, a profit-maximizing manager should chose the plan with the lowest present value.
1) TRUE
2) FALSE
3) TRUE
4) FALSE
5) TRUE
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For most firms, the biggest cost of doing business is wages
Indicate whether the statement is true or false
The price specified on an option at which the holder can buy or sell the underlying asset is called the
A) premium. B) call. C) strike price. D) put.
The monopolistically competitive firm differs from monopoly in that its
a. demand curve is flatter. b. demand curve slopes downward. c. MR curve lies below its demand curve. d. profit is maximized where MR = MC.
Which of the following is not correct?
a. The demand curve facing a competitive firm is perfectly elastic. b. The demand curve facing a monopolist is the market demand curve. c. A monopolist can charge any price and sell any quantity that it chooses. d. A monopolist can alter the market price by adjusting the quantity that it produces.