The Hazards, a professional baseball team, want to sign pitcher Alex McScoob to a two-year contract but, because of salary cap limitations, can only pay $8 million for the first year (Alex's market value is $10 million per year). The Hazards offer to pay
$8 million in year 1 and $13million in year 2. Should Alex sign the contract?
A. Yes, Alex is better off financially regardless of the interest rate.
B. Yes, if the interest rate is less than 50 percent.
C. Yes, but only if the team expects to be successful.
D. Yes, but only if the interest rate is less than 10 percent.
B. Yes, if the interest rate is less than 50 percent.
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Government actions to compel more competition in an industry
A) always entail costs, which must be compared to any gains created by the policy. B) always have the effect of lowering prices to consumers. C) cannot benefit anyone if they result in greater inefficiency. D) will result in lower prices but cannot bring about a larger output. E) will not succeed because competition, like morality, cannot be legislated.
Although the efficient quantity to produce of any good is located where marginal social benefit and marginal social cost are equal, there will usually be other quantities where the sum of consumer and producer surplus are greater
Indicate whether the statement is true or false
Assuming that C + Ir + G > C + I + G, then
a. there is an unintended inventory accumulation. b. there is an unintended inventory shortfall. c. aggregate demand is less than output. d. Both b and c
The following estimation methods should not be used to test for randomization when Xi, is binary:
A) linear probability model (OLS) with homoskedasticity-only standard errors. B) probit. C) logit. D) linear probability model (OLS) with heteroskedasticity-robust standard errors.