In a market with a price support set above the equilibrium price,
A) consumers gain.
B) taxes on consumers decrease.
C) marginal benefit exceeds marginal cost.
D) the market is efficient.
E) farmers gain.
E
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Leo is a welfare recipient who qualifies for two means-tested cash benefit programs. If he does not earn any income, he receives $225 from each program. For each dollar he earns (which his employer is required to report to the welfare agency), his benefit from each program is reduced by 75 cents until the benefit equals zero. Suppose Leo earns $10. He will lose ________ from each benefit, for a total loss of ________.
A. $7.50; $15.00 B. $7.50; $7.50 C. $.75; $1.50 D. $.75; $1.00
The greater a household's ________ the less is its saving
A) return from saving B) wealth C) disposable income D) expected future profits
In the monetary small open-economy model with a flexible exchange rate, an increase in the world real interest rate
A) increases domestic output and increases the nominal exchange rate, as long as real money demand is much more responsive to real income than to the real interest rate. B) increases domestic output and decreases the nominal exchange rate, as long as real money demand is much more responsive to real income than to the real interest rate. C) decreases domestic output and increases the nominal exchange rate, as long as real money demand is much more responsive to real income than to the real interest rate. D) decreases domestic output and decreases the nominal exchange rate, as long as real money demand is much more responsive to real income than to the real interest rate.
A firm must spend $10 million today on a project that is expected to bring in annual revenues of $1.5 million for the next 10 years (beginning at the end of year 1)
a. If the firm's cost of capital is 5%, what is the NPV of this project? b. If the firm's cost of capital is 10%, what is the NPV of this project? c. What is the internal rate of return?