Suppose you had $1000 and were deciding between two investments. One pays 5% a year for two years while the other pays 8% the first year and 2% the second year. Which investment would provide a higher return?
What will be an ideal response?
The first investment which earned 5% a year for two years would result in $1,102.50 after two years. The second investment would result in $1,101.60. Thus, the first investment provides the higher return.
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Which of the following is NOT a characteristic of a private good?
a. rivalry in consumption b. benefits of consumption are nonexcludable c. consumption of the good precludes consumption by another individual d. the benefits to a consumer of consuming the good are exclusive to that individual
Marcus sells 300 candy bars at $0.50 each. His total costs are $125. His profits are
A. $25. B. $124.50. C. $125. D. $150.
When real consumption expenditure is plotted against real disposable income the resulting relationship is
a. very weak. b. positive and very curvi-linear. c. positive and very close to linear. d. negative and very close to linear. e. virtually flat.
If every country uses tariffs, everyone is likely to lose
a. True b. False Indicate whether the statement is true or false