A $130,000 investment in new equipment this year will increase your firm's profits by $50,000 in each of the next 3 years. What is the net present value of this investment if your firm's opportunity cost of capital is 10 percent?
A) -5,657
B) 5,657
C) 124,343
D) 128,850
A
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Changes in market prices tend to
A) change the plans of suppliers. B) change the plans of demanders. C) change the plans of suppliers and demanders. D) have no predictable effect on anybody's plans.
Because of diminishing marginal utility, you
A. should never buy more than one unit of a good, since additional units decrease your total utility. B. have to consider the effect of additional units on your total utility when you make purchases. C. wind up paying for units that you receive no benefit from. D. always want to increase your consumption of a good until the marginal utility you get is zero.
Use the above table. If these two countries, Alpha and Beta, specialize based on comparative advantage
A) Alpha will specialize in cookies, and Beta will specialize in coffee production. B) Alpha will specialize in producing both items. C) Beta will specialize in producing both items. D) Alpha will specialize in coffee, and Beta will specialize in cookies.
If Noah thinks the last dollar spent on belts yields more satisfaction than the last dollar spent on socks, and Smith is a utility-maximizing consumer, he should
a. decrease his spending on socks. b. decrease his spending on socks and increase his spending on belts. c. increase his spending on belts. d. increase his spending on socks and decrease his spending on belts.