Which of the following can be considered an income risk?
a. Recession causing loss of pay to employees working in a particular industry
b. Fall in employee turnover affecting company profits
c. Economic growth resulting in demand-pull inflation
d. Stock market boom encouraging investment in risky assets
A
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The benefit estimation method that uses surveys about hypothetical market conditions is
a. the averting expenditure method c. the travel cost approach b. the contingent valuation method d. the political referendum approach
Money solves the dilemma of a double coincidence of wants by serving as a
A) unit of account. B) medium of exchange. C) symbol of value. D) store of value.
Sail with Us is considering a three-year advertising campaign. The campaign will cost $100,000 at the end of each of the three years. The managers of Sail with Us have estimated that the campaign will generate $80,000 a year in additional profit for the next five years. If the discount rate is 2 percent, what is the net present value of the advertising campaign?
A) $90,213 B) $95,228 C) $78,569 D) $88,68
Critics of advertising argue that in some markets advertising may
a. attract products of lower quality into the market. b. attract less informed buyers into the market. c. decrease elasticity of demand allowing firms to charge a larger markup over marginal cost. d. enhance competition in markets to an unnecessary degree.