An individual is endowed with $100 of income in period 1, and will receive an income of 121 in period 2. The interest rate is 10%, and there are only 2 periods. In order to have the same level of consumption in both periods, each period’s consumption must be
a) 80
b) 100
c) 110
d) 110.5
e) 121
c) 110
You might also like to view...
Marginal product of labor refers to the
A. change in total product resulting from employing one more unit of labor. B. total product divided by the number of units of labor employed. C. smallest amount of output produced by labor. D. last unit of output produced by labor at the end of each period.
Refer to Figure 10.1. If Daisy does not contribute to the lighting, Bo should
A) contribute if Luke contributes. B) not contribute only if Luke does not contribute. C) not contribute regardless of what Luke decides to do. D) contribute if Luke does not contribute.
Which of the following is a source of market failure?
A) an inequitable income distribution B) unforeseen circumstances which leads to the bankruptcy of many firms C) a lack of government intervention in a market D) incomplete property rights or inability to enforce property rights
Happy Cows contractually requires distributors who purchase Happy Cows' milk to also purchase Happy Cows' cream. The legality of the practice will be evaluated under Section ________ of the Clayton Act.
A) 7 B) 8 C) 2 D) 3