The ________ of a project is the sum of all costs and benefits associated with the project, using present values to make the costs and benefits comparable
A) discounted value
B) cumulative present value
C) net present value
D) gross present value
C
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Suppose that the price of compact disks (CDs) increases, other things equal. Which of the following in the most likely effect in the market for DVDs?
a. a decrease in demand for DVDs b. an increase in demand for DVDs c. an increase in quantity demanded of DVDs d. a decrease in quantity demanded of DVDs e. a decrease in the quantity supplied of DVDs
One of the ugly stepsisters argues that she, rather than Cinderella, should go to the ball because she will derive more utility from it than Cinderella. An economist would: a. agree, since the ugly stepsister's reasoning is sound
b. want to know how much utility each will receive from attending the ball in order to determine which woman should attend. c. point out that making interpersonal utility comparisons is not possible. d. ask how many balls each woman has attended in order to calculate the marginal utility that each would derive from attending, and then decide who should go to the ball.
Which is not a property of an optimal efficiency wage?
A. Any structural unemployment that results from an efficiency wage is efficient for the economy as it helps sort nonshirkers and shirkers into good and bad jobs, respectively. B. There is involuntary unemployment. C. The efficiency wage is higher than the competitive wage. D. Employment will be less with an efficiency wage than with a competitive wage. E. Employed workers will not shirk on the job.
One reason some manufacturing companies began moving production to China in the early 2000s was due to lower wages that could be paid to Chinese workers. Moving manufacturing to China to take advantage of lower wages so goods could be produced at a lower
cost than if produced in the United States exemplifies which key economic idea? A) People are rational. B) People respond to economic incentives. C) Optimal decisions are made at the margin. D) The market system relies on the principle of voluntary exchange.