According to the Weber-Fechner law, when the change in a stimulus is small in proportion to the original stimulus, the perceived size of the change will be:
A. small.
B. large.
C. greater than one.
D. impossible to determine.
Answer: A
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A highly liquid asset
A) generally has a very limited market for its resale. B) has high transaction costs associated with its sale. C) must be held for a substantial period of time. D) can be disposed of easily without loss of value.
If the discount rate increases
A) NPV does not change. B) NPV rises. C) NPV falls. D) investment also increases.
Sally quit her job as an auto mechanic earning $50,000 per year to start her own business. To save money she operates her business out of a small building she owns which, until she started her own business, she had rented out for $10,000 per year. She
also invested her $20,000 savings (which earned a market interest rate of 5% per year) in her business. You are given the following information about the first year of her operations. Total revenue $120,000 Cost of labor 40,000 Cost of materials 15,000 Equipment rental 5,000 a. Calculate her economic costs for the first year. b. Calculate her accounting costs for the first year. c. Calculate her implicit costs for the first year. d. Sally tells you that she would really like to move to a location closer to town but she decided against it because "right now I don't pay any rent and it will cost me $10,000 a year to rent near town." Do you agree with her reasoning?
From 1989 to 2013, the share of wealth for the top 3% of wealth holders in the United States
A. remained roughly the same. B. increased by almost 10 percentage points. C. increased by more than 45 percentage points. D. decreased by about 8 percentage points.