Suppose you win a small lottery and you are given the following choice: You can receive (1) an immediate payment of $10,000 or (2) two annual payments, each in the amount of $5,200, with the first payment coming one year from now, and the second payment coming two years from now. You would choose to take the immediate payment of $10,000 if the interest rate is
a. 2 percent, but not if the interest rate is 1 percent.
b. 3 percent, but not if the interest rate is 2 percent.
c. 4 percent, but not if the interest rate is 3 percent.
d. 5 percent, but not if the interest rate is 4 percent.
b
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The cost data in the above table data show that production is characterized by
A) economies of scale. B) constant returns to scale. C) decreasing returns to scale. D) More information is needed to answer the question.
Acme Steel Co produces 1000 tons of steel. Steel sells for $30 per ton. Acme pays wages of $10,000. Acme buys $15,000 worth of coal, which is needed to produce the steel. Acme pays $2,000 in taxes. Acme's profit is
A) $0. B) $2,000. C) $3,000. D) $15,000.
Ronald Coase's study, "The Nature of the Firm," argued that firms are formed to take advantage of situations in which hierarchies are more efficient than markets
a. True b. False
Given the desire of politicians to get reelected, they might try in the short run to use _____
a. a contractionary monetary policy b. an expansionary fiscal policy c. an expansionary monetary policy d. tax increases e. automatic stabilizers to control demand