Suppose you make a $5,000 investment that will return $3,000 in year 2 and another $3,500 in year 4. With an interest rate of 4.5%, what is the NPV of this project?
A. $247.34
B. $682.16
C. $1,500.00
D. $2,162.50
B. $682.16
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Buying insurance is similar to
A) selling risk. B) irrationally avoiding life's risks. C) being a free rider. D) buying risk.
The word "util" has been used by economists in the past as an objective measure of utility. Today economists believe that
A) the util truly is an objective, rather than a subjective, measure of utility. B) utility can be measured objectively because people can use prices of different goods to measure utility. C) utility cannot be measured objectively. D) all of the important conclusions of the economic model of consumer behavior depend on utility being measured objectively.
Economies of scale in nuclear power plants exist because of
A) more efficient plant management. B) a better understanding of the plant's idiosyncrasies, or learning-by-doing. C) nuclear power technology changes. D) both A and B.
Which of the following goods would be most likely to feature an income elasticity of zero?
a. tickets to a championship football game b. insulin c. orange juice d. cigarettes