Suppose an investment will yield $1,000 after one year and $2,000 after two years. What is the present value of this investment if the discount rate is 8 percent?
a. $2,479.34
b. $2,640.60
c. $2,727.27
d. $3,000
e. $3,520
B
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A natural monopoly regulated with a marginal cost pricing rule results in
A) an economic loss for the regulated firm. B) an economic profit for the regulated firm. C) a normal profit for the regulated firm. D) a deadweight loss.
Which of the following is an argument that the incidence of corporate taxation falls entirely on consumers?
A) Corporations pass their tax burdens on to consumers by charging higher prices equal to the amount of the tax. B) Corporations pass their tax burdens on to consumers because consumers ultimately work for the corporations. C) Corporations always evade taxes so that consumers ultimately bear the tax burdens as taxpayers. D) Most taxes on consumers are collected by corporations through sales taxes.
High economic growth of a country refers to
A. a large increase in per capita real Gross Domestic Product (GDP). B. a high level of real Gross Domestic Product (GDP). C. a large increase in the values of natural resources. D. a high level of per capita real Gross Domestic Product (GDP).
A perfectly competitive firm, Paula's Pineapple Farm, is incurring a loss. In the short run it should continue to produce if ________, but in the long run, if there is no change in economic conditions, it should exit the industry.
A. price is above minimum ATC B. price is equal to minimum ATC C. price is above minimum AVC D. price is below minimum AVC