If the elasticity of supply is 4, a 10 percent increase in the price of a good leads to a
A) 40 percent increase in the quantity of supply.
B) 4 percent decrease in the quantity demanded.
C) 2.5 percent increase in the quantity supplied.
D) 2.5 percent decrease in the quantity demanded.
A
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Cash equivalents are:
A) assets that do not attract interest, and hence generate no additional revenue. B) a part of a bank's liability. C) the amount of deposits held by the public in a particular bank. D) riskless, liquid assets that banks can immediately access.
In Figure 13-1, which panel shows the effect of a recession on the interest rate?
a. Panel (B)
b. Panel (A)
c. Panel (C)
d. Panel (D)
A firm has to choose between projects X and Y. Project X's internal rate of return is positive. If the cash flow of project Y is discounted at project X's internal rate of return, this firm will
A) choose project X if the net present value of project Y is positive. B) choose project X if the net present value of project Y is negative. C) choose project Y if the net present value of project Y is positive. D) choose project X regardless of the net present value of project Y.
Refer to the table below. If Tacos R Us sells its taco shells separately, what is the profit-maximizing price to charge?
Tacos R Us sells two different types of products; taco shells and taco sauce. For simplicity, assume that the marginal cost of each product is $0, so that Tacos R Us' total revenue is also its total profit.
A) $5
B) $3
C) $7
D) $4