Health Bars is considering a two-year advertising campaign. The campaign will cost $50,000 at the end of the first year and $60,000 at the end of two years. The managers of Health Bars have estimated that the campaign will generate $40,000 a year in additional profit for the next three years. If the discount rate is 5 percent, what is the net present value of the advertising campaign?
A) $6,889
B) $2,542
C) $12,582
D) $5,200
A) $6,889
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The recession of 2007-2009 would most likely be represented in a production possibilities frontier graph by
A) a point on the frontier. B) a point inside the frontier. C) a point outside the frontier. D) an intercept on either the vertical or the horizontal axis.
For productive efficiency to hold
A) average variable cost is minimized in production. B) average total cost is minimized in production. C) price must equal the marginal cost of the last unit produced. D) price must equal marginal revenue of the last unit sold.
In the long-run ISLM model and with everything else held constant, the long-run effect of an autonomous increase in investment is to ________ real output and ________ the interest rate
A) increase; increase B) increase; not change C) not change; increase D) not change; decrease
If the opportunity costs of producing a good increase as more of that good is produced, the economy's production possibility frontier will be
A. a negatively sloped straight line. B. negatively sloped and "bowed inward" toward the origin. C. negatively sloped and "bowed outward" from the origin. D. a positively sloped straight line.