If the present discounted value of a payment is $1,000,000 and there is a 40 percent chance that the payment will not occur, then the expected value is
A. $1,400,000.
B. $1,000,000.
C. $400,000.
D. $600,000.
Answer: D
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If the price elasticity of demand for smart watches is 1.4 (dropping the minus sign), then a 50 percent increase in the price of smart watches will lead to
A. the sale of 200 additional smart watches. B. the sale of 125 percent fewer smart watches than before. C. the sale of 70 percent fewer smart watches than before. D. the sale of 25 percent fewer smart watches than before.
The cross price elasticity of demand for a good x is the percentage change in the quantity demanded of good x in response to a given percentage change in
A) income. B) the price of good x. C) the price of good y. D) the quantity demanded of good y.
The above figure shows four different markets with changes in either the supply curve or the demand curve. Which graph best illustrates the market for tea after severe weather destroys a large portion of the coffee crop?
A) Graph A B) Graph B C) Graph C D) Graph D
Which of the following is the primary tool the Fed uses to control the supply of money?
a. the discount rate b. the reserve requirements c. open market operations d. the 30-year home-mortgage interest rate