You receive $500 today which you plan to save for two years. Also, in two years you will be given another $500 . If the interest rate is 5 percent, what is the present value of the payment of $500 today and the $500 in two years?
a. $500(1.05)2 + $500/(1.05)2
b. $500(1.05)2 + $500
c. $500 + $500/(1.05)2
d. $500 + $500
c
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The word "util" has been used by economists in the past as an objective measure of utility. Today economists believe that
A) the util truly is an objective, rather than a subjective, measure of utility. B) utility can be measured objectively because people can use prices of different goods to measure utility. C) utility cannot be measured objectively. D) all of the important conclusions of the economic model of consumer behavior depend on utility being measured objectively.
The trend in current tariff laws is to
A) raise tariffs on foreign goods. B) keep tariffs the same. C) lower tariffs on foreign goods. D) abolish tariffs all together.
What's the firm's contribution margin?
a. $1800 b. $800 c. $1000 d. $300
Classical macroeconomic theorists believed that during an economic downturn, wages would ________, which in turn would lead prices to ________.
A. rise; fall B. fall; fall C. rise; rise D. fall; rise