If the firm learns that the complicated technology can be made more stable with a few tweaks increasing the cost by 5.5million and increasing the probability of a launch to 50%. Is it worth for the firm to invest the $500,000 in tweaks?
a. No, because it decreases the total expected value
b. Yes, because it increases expected value
c. No, because it increases risk
d. Yes, because tweaking is good
b
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Which of the following is likely to happen during a boom?
A) The Fed will increase the federal funds rate. B) The Fed will lower the federal funds rate. C) The Fed will increase the supply of money. D) The Fed will lower the reserve requirement.
You have a bond that pays $18 per year in coupon payments. Which of the following would result in a decrease in the price of your bond?
A) The likelihood that the firm issuing your bond will default on debt decreases. B) Coupon payments on newly-issued bonds rise to $22 per year. C) The price of a share of stock in the company rises. D) Coupon payments on newly-issued bonds fall to $15 per year.
For a resource to be able to generate sustained competitive advantage over rivals, it must be
a. Valuable b. Rare c. Difficult to imitate or substitute away from d. All of the above
In a competitive labor market, marginal revenue product equals marginal product times the wage rate
a. True b. False Indicate whether the statement is true or false