Compute the present value of a preferred stock that pays, in perpetuity, an annual cash flow of $200 at an annual interest rate of 5 percent.
A. $190.48
B. $4,000
C. $210
D. $4,200
Answer: B
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Capitalism is based on all of the following except
A. the "invisible hand". B. the price mechanism. C. trust. D. equity.
With a cubic production function of the form Q = aK3L3 + bK2L2, in order for the average and marginal product functions to have their usual theoretical properties, it must be the case that
A. a > 0, b > 0 B. a < 0, b > 0 C. a < 0, b < 0 D. a > 0, b < 0
The marginal revenue product is
A. the change in marginal revenue resulting from a one-unit change in variable input. B. the change in marginal output resulting from a one-unit change in variable input. C. the change in total revenue resulting from a one-unit change in variable input. D. the change in total output resulting from a one-unit change in variable output.
According to the Lucas supply function, if people's expectations are ________, then the amount of output they produce is not related to the price level.
A. too low B. on target C. too high D. none of the above