The present value model of investment states that an asset's current price should be equal to the:
A. Sum of the present values of all of its future payments or earnings
B. Sum of all of its future payments or earnings times the number of years of its life
C. Life of the asset times the present values of all of its future payments or earnings
D. Present values of all of its future payments or earnings divided by its life in years
A. Sum of the present values of all of its future payments or earnings
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When an economist uses the term "cost" referring to a firm, the economist refers to the
A) price of the good to the consumer. B) explicit cost of producing a good or service but not the implicit cost of producing a good or service. C) implicit cost of producing a good or service but not the explicit cost of producing a good or service. D) opportunity cost of producing a good or service, which includes both implicit and explicit cost. E) cost that can be actually verified and measured.
Using a production possibilities frontier, economic growth is illustrated by a
A) point inside the curve. B) point on the curve. C) movement from one point on the curve to another point on the curve. D) rightward shift of the curve.
If all of the following examples are elastic, which one will most likely have a decrease of revenue?
a. The price of radios rises. b. The price of sports drinks falls. c. The price of picture frames remains constant. d. The quantity supplied of eye liner remains constant.
In 1975, New York City increased regulated taxi fares by 17.5 percent and expected taxi revenue to increase a like amount. The taxi commission believed taxi demand was
a. unit elastic. b. inelastic. c. elastic. d. perfectly inelastic.