A pizza shop owner needs to buy a pizza oven and is deciding between a new one and a used one. If he buys an older used one it will generate $4,000 of net income for 3 years. If he buys a new one it will generate $5,000 of net income for 4 years. If the
interest rate is 10%, what is the difference in value between the two ovens? (Assume that each year's revenue is received at the end of the year.)
a. $793.83
b. $2,577.10
c. $6,252.25
d. $2,777.78
e. $1,000
Answer: C
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Depreciation of the Japanese yen would lead to
A. outward shift in the aggregate supply curve for Japan. B. upward shift in the aggregate demand curve for Japan. C. downward shift in the aggregate supply curve for Japan. D. inward shift in the aggregate demand curve for Japan.
In the foreign exchange market, the supply curve for dollars slopes upwards because
A) as the exchange rate rises, imports become more expensive, and more dollars are supplied to pay for the imports. B) as the exchange rate rises, imports become cheaper, and more dollars are supplied to pay for the increase in the quantity of imports. C) as the exchange rate rises, more dollars are supplied since the profit from selling dollars falls. D) supply curves always slope upwards.
Bobby spends $100 per month on pizza and CDs. His utility from these goods is shown in the table above. The price of a pizza is $10 and the price of a CD is $20. Which of the following combinations of the two goods maximizes Bobby's utility?
A) 2 pizzas and 4 CDs B) 6 pizzas and 2 CDs C) 4 pizzas and 3 CDs D) 8 pizzas and 1 CDs
Refer to Figure 6-8. Identify the two goods which are substitutes
A) Good X and Good Z B) Good Y and Good Z C) Good X and Good Y D) It is not possible to distinguish any relationship among the goods.