Consider the following game. You roll a six-sided die and each time you roll a 6, you get $30. For all other outcomes you pay $6. The $30 when you "win" and the -$6 when you "lose" are called
A. incentives.
B. trade-offs.
C. expected values.
D. payoffs.
Answer: D
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Firms in perfect competition produce the productively efficient output level in the short run and in the long run
Indicate whether the statement is true or false
Suppose a manager is deciding whether or not to purchase a piece of equipment to make an input internally and has completed the majority of the net present value (NPV) calculations. The manager has correctly calculated the NPV to be equal to: NPV = ($1.052 × Q) - $250,000, where Q is the annual quantity of the input the firm needs. In order for the NPV to be positive, the firm needs at least
________ units of the input each year. A) 115,960 B) 259,600 C) 237,643 D) 220,890
If a good is inferior and its price decreases,
a. the income effect will be positive and the substitution effect will be positive. b. the income effect will be negative and the substitution effect will be negative. c. the income effect will be positive and the substitution effect will be negative. d. the income effect will be negative and the substitution effect will be positive.
Which of the following transactions takes place in the markets for the factors of production in the circular-flow diagram?
a. Dylan receives a salary for his work as a financial analyst for an investment firm. b. Kristin buys two business suits to wear to her job as a Chief Information Officer. c. Jim receives clean water in his home in exchange for paying his water bill. d. Caroline owns a nail salon and receives payments from her clients for her services.