Estimation of the present value of lost current and future income must consider
A. any risk of unemployment.
B. the expected length of working life.
C. any possible future raises.
D. all of the options are correct.
Answer: D
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Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whether you should go with them. The round-trip airfares are $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfares are $450.What is the opportunity cost of using the coupon for the Miami trip?
A. $500 B. $450 C. $100 D. $550
Suppose Acme and Mega produce and sell identical products and face zero marginal and average cost. Below is the market demand curve for their product. Suppose Acme and Mega decide to collude and work together as a monopolist with each firm producing half the quantity demanded by the market at the monopoly price. If Mega cheats on the agreement by reducing its price to $1 while Acme continues to comply with the collusive agreement, then Mega's economic profit will be ________.
A. $150 B. $200 C. $75 D. $100
Other things the same, which of the following happens if the price level rises?
a. Money demand shifts rightward. b. Initially there is an excess demand for money in the money market. c. The interest rate rises. d. All of the above are correct.
Which of the following would most likely prevent the firm from shutting down?
a. the AVC curve moving further above P
b. the ATC curve moving partly below P
c. the ATC curve moving further above P
d. the AVC curve moving completely below P