The amount of money borrowed in a transaction is called:
A. interest.
B. principal.
C. internal rate of return.
D. present discounted value.
B. principal.
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Denmark has a comparative advantage in cheese production, and Holland has a comparative advantage in beer production
The two countries initially trade cheese and beer based on their comparative advantages, but the government of Denmark later closes the border to trade with Holland. What is the likely impact of this trade restriction? A) Danish cheese consumers are worse off, and beer producers in Holland are better off. B) Cheese consumers in both countries are worse off. C) Beer consumers in Holland are worse off, and cheese producers in Denmark are better off. D) Beer consumers in Holland are better off, and cheese producers in Holland are better off.
Demand for inputs is a derived demand because
a. it is derived from the need for income. b. it corresponds to the derived supply of the inputs. c. producers want the input to produce the finished good. d. it is downward sloping.
If a nation starts out with very little capital
A. it is doomed to eternal poverty because it will not be able to divert productive resources from producing consumer goods to producing capital goods. B. it can quite easily divert some resources from producing consumer goods to producing capital goods. C. if it possesses a valuable commodity that the industrial world wants such as oil, it can sell its oil in exchange for plant and equipment and thus industrialize. D. None of the choices are true.
The accompanying table below shows how total donations, average donations, total labor costs and average labor costs vary depending on the number of employees State U hires for its fundraising activities. Number of EmployeesTotal DonationsAverage DonationsTotal Labor CostsAverage Labor Costs1$30,000 $8,0002$42,426 $17,000 3 $17,321$27,000 4$60,000 $9,5005 $13,416$50,000 The Chair of the Economics Department at State U says that fundraising employees should be hired as long as their marginal benefit exceeds their marginal cost. If the University follows this advice, then ________ employee(s) will hired, and the net benefit (total donations minus total labor costs) will be ________.
A. 1; $22,000 B. 2; $25,426 C. 2; $3,476 D. 3; $25,426