What is the present value of $750 received three 3 years from now if the current rate of interest is 7%?
A) $612.22
B) $700.93
C) $918.78
D) $2,407.50
A
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What would happen if three more restaurants opened in a small town where only four restaurants were open for business originally?
A. People would pay higher prices to eat out. B. The town would raise significantly more taxes. C. The restaurants would become more like a competitive market. D. The restaurants would form a cartel in the town.
As a fishing firm hires its first, second, and third workers, it could find that marginal product actually rises. The reason for this is:
A. diminishing returns have set in. B. the division of labor creates greater productivity. C. less qualified workers are becoming available. D. all workers perform identical tasks.
It is likely that a small increase in a country's saving rate will have
A. a large effect on per capita real GDP immediately because the increase in saving leads to a much larger rate of economic growth. B. a small effect on per capita real GDP many years later because the increase in saving will have very little effect on the growth rate. C. a large effect on per capita real GDP many years later because the increase in saving leads to a slightly higher rate of economic growth which has large effects over time. D. a small effect on per capita real GDP many years later because the increase in saving will be offset in later years by a decrease in the saving rate.
Liu's Potato Chips is a perfectly competitive firm currently employing 30 workers. The marginal revenue product of the 30th worker is $7.00 per hour. The wage rate is $8.00 per hour. To increase profits, this firm should
A. increase employment until the MRP of labor equals $8.00. B. continue hiring 30 workers because the firm earns a surplus of $1.00 on each worker hired. C. decrease employment until the MRP of labor equals $8.00. D. increase the price of potato chips so that the marginal revenue product increases to $8.00 per hour.