Suppose you were given $100,000 by your grandparents and told that you could spend half of it but were to invest the other half to give your own grandchild a gift. What concept would you use to figure out how much your present to your grandchild would be worth in 40 years?
A. Internal Rate of Return
B. Future Value
C. The Rule of 72
D. Present Value
Answer: B
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What do most empirical studies of labor supply in the United States conclude concerning the elasticity of labor supply and what implication does this have with respect to who bears the burden of the payroll tax?
What will be an ideal response?
Randomization based on covariates is
A) not of practical importance since individuals are hardly ever assigned in this fashion. B) dependent on the covariances of the error term (serial correlation). C) a randomization in which the probability of assignment to the treatment group depends on one of more observable variables W. D) eliminates the omitted variable bias when using the difference estimator based on Yi = ?0 + ?1Xi + ui, where Y is the outcome variable and X is the treatment indicator.
A local business sells its product for $40 each in a competitive price-taker market. At its present rate of output, it's marginal cost is $40, average variable cost is $45, and average total cost is $60 . The business should
a. increase output b. reduce output but not to zero c. maintain the present rate of output d. shut down e. raise the price
In most business situations where firms compete, often they can escape the prisoner's dilemma and reach the most profitable outcome. Which of the following is a reason for this?
A) Firms engage in aggressive advertising to overcome the barriers to loyalty. B) Most games are one-shot games so firms learn from their mistakes. C) Most games are repeated games and firms can employ retaliation strategies against those who do not cooperate. D) Firms are constantly improving their products and anticipating changing consumer tastes.