A financial services company offers to pay you $1,000 a year for life in exchange for $20,000 today. What factors affect your decision to take this offer?
What will be an ideal response?
This policy has an internal rate of return of 1/20 = 5%. If the interest rate exceeds 5%, then there are better investments elsewhere. If the interest rate is less than 5%, this is a good deal.
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Allocative efficiency occurs when
A) we cannot produce more of any good without giving up some other good that we value more highly. B) we cannot produce more of any one good without giving up some other good. C) marginal benefit exceeds marginal cost. D) opportunity costs are decreasing.
It is generally more profitable for a firm to pay workers more than the going wage rate:
A. in sectors where skills are scarce. B. in industries in which worker motivation doesn’t really matter. C. in areas in which turnover is not very costly. D. All of these are true.
A cold winter will increase the quantity of heating fuel demanded at every price
a. True b. False Indicate whether the statement is true or false
What are the effects of migration on the real wages and output of a low-wage nation and a high-wage nation? What are the simplifications used to analyze these effects?
What will be an ideal response?