What is the present value of an infinite stream of annual payments of $10,000 per year if the first payment is received one year from today? Assume the interest rate is 10 percent
a. $100,000
b. $1,000,000
c. $10,000,000
d. $1,000,000,000
a
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A clause in a mortgage loan contract requiring the borrower to purchase homeowner's insurance is an example of a
A) proscriptive covenant. B) prescriptive covenant. C) restrictive covenant. D) constraint-imposed covenant.
The Cournot theory of oligopoly assumes rivals will:
A. keep their output constant. B. follow the learning curve. C. decrease output whenever a firm increases its output. D. increase their output whenever a firm increases its output.
Opportunity cost exists because of
A) poverty. B) scarcity. C) greed. D) self-interest.
The difference between what can be produced and consumed without specialization and trade and with specialization and trade is called:
a. comparative advantage. b. a tradeoff. c. marginal cost. d. opportunity cost. e. gains from trade.