If the interest rate is 10 percent, the present value of a payment of $1,000 one year from today is
A) $900.
B) $909.
C) $1,000.
D) $1,100.
B
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Which of the following is not included in personal consumption?
A. Purchases of new construction by consumers B. Payments for cable and Internet services to homes C. New furniture and appliances bought by homeowners D. Food purchased at supermarkets
Suppose a risk-neutral power plant needs 10,000 tons of coal for its operations next month. It is uncertain about the future price of coal. Today it sells for $60 a ton but next month it could be $50 or $70 (with equal probability). How much would the power plant be willing to pay today for an option to buy a ton of coal next month at today's price? (Ignore discounting over the short period of a
month.) a. 5 b. 4 c. 3 d. 0
In a monopolistically competitive market, how do we model the firm's slight control over the price that they charge?
A. The demand curve is downward sloping and very elastic. B. The demand curve is downward sloping and very inelastic. C. The ATC is relatively flat. D. The AVC is horizontal.
After tickets for a major sporting event are purchased at the official box office price, a market often develops whereby these tickets sell at prices well above the official box office price. Which of the following scenarios would NOT be able to explain this result?
A) The official price was below equilibrium from the moment the tickets were available. B) Increased publicity causes the demand curve for the event to shift rightward. C) The event was not a sellout. D) Not everyone who wanted a ticket was able to buy one at the box office.