A state lottery has a Million Dollar Lottery game that pays $1,000 a week for life. Assuming a 6% nominal rate of interest and generously assuming an infinite lifetime, can this game be called a "Million Dollar Lottery"?
What will be an ideal response?
Assuming that the payments last forever, the present value of the payments is roughly 52,000/.06 = $866,667. Not really a million dollars.
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What does monopolistic competition have in common with monopoly?
A) a large number of firms B) a downward-sloping demand curve C) the ability to collude with respect to price D) mutual interdependence E) barriers to entry
A market structure in which a small number of firms compete is called ________
A) a monopoly B) a small-number market C) an oligopoly D) monopolistic competition
We can derive the market demand curve for gold earrings
A) only if the tastes of all gold earring consumers are similar. B) by adding the prices each gold earring consumer is willing to pay for each quantity. C) by adding horizontally the individual demand curves of each gold earring consumer. D) by adding vertically the quantity demanded of each gold earring consumed at each price.
Economic sanctions
A) usually work to create policy change in the targeted country. B) are more likely to work if the international community supports them. C) are more likely to work if military force is not used. D) never work to create policy change in the targeted country. E) Both A and C.