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 = ($1.023 × Q) - $350,000, 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) 342,131
B) 153,985
C) 289,526
D) 35
A) 342,131
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Income has risen in the simple Keynesian model. This could be the result of:,
a. an equal increase in government spending and taxes. b. an increase in unplanned investment. c. an increase in taxes d. a decrease in autonomous consumption. e. none of the above
Which of the following are counterarguments to the viewpoint that taxes are social tools by which we can achieve a more equal society?
a. Redistribution of income through government is unfair coercion of those with higher incomes. b. Inequality is frequently the result of higher productivity and thus is just. c. Equality of income occurs naturally over the life cycle so redistribution at one point in time disrupts this natural process. d. a and b e. a and c
Consider the indifference curve map and budget constraint for two goods, beef and potatoes. Suppose the good measured on the horizontal axis, potatoes, is a Giffen good. Beef is measured on the vertical axis and is a normal good. When the price of potatoes increases, the substitution effect causes
a. an increase in the consumption of potatoes, and the income effect causes a decrease in the consumption of potatoes. The substitution effect is less than the income effect. b. a decrease in the consumption of potatoes, and the income effect causes an increase in the consumption of potatoes. The substitution effect is greater than the income effect. c. an increase in the consumption of potatoes, and the income effect causes a decrease in the consumption of potatoes. The substitution effect is greater than the income effect. d. a decrease in the consumption of potatoes, and the income effect causes an increase in the consumption of potatoes. The substitution effect is less than the income effect.
Individuals economize and respond predictably to
a. positive incentives, but not negative incentives. b. negative incentives, but not positive incentives. c. both positive and negative incentives. d. neither positive or negative incentives.