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Suppose total benefits and total costs are given by B(Y) = 100Y – 8Y2 and C(Y) = 10Y2. What level of Y will yield the maximum net benefits?
Correct answer(s):
- 100/36
Suppose total benefits and total costs are given by B(Y) = 100Y – 8Y2 and C(Y) = 10Y2. Then marginal costs are:
Correct answer(s):
- 20Y
Suppose total benefits and total costs are given by B(Y) = 100Y – 8Y2 and C(Y) = 10Y2. Then marginal benefits are:
Correct answer(s):
- 100 - 16Y
Given the benefit function B(Y) = 400Y – 2Y2, the marginal benefit is:
Correct answer(s):
- 400 - 4Y
Given the cost function C(Y) = 6Y2, what is the marginal cost?
Correct answer(s):
- 12Y
In order to maximize net benefits, firms should produce where:
Correct answer(s):
- Marginal benefits equal marginal costs
The difference between marginal benefits and marginal costs are the:
Correct answer(s):
- Marginal net benefits
The change in net benefits that arise from a one unit change in quantity is the:
Correct answer(s):
- Marginal net benefits
The difference between marginal benefits and marginal costs are the:
Correct answer(s):
- Marginal net benefits
The change in net benefits that arise from a one unit change in quantity is the:
Correct answer(s):
- Marginal net benefits
The additional cost incurred by using an additional unit of the managerial control variable is defined as the:
Correct answer(s):
- Marginal cost
The additional benefits that arise by using an additional unit of the managerial control variable is defined as the:
Correct answer(s):
- Marginal benefit
To maximize profits, a firm should continue to increase production of a good until:
Correct answer(s):
- Marginal revenue equals marginal cost
Suppose the interest rate is five percent, the expected growth rate of the firm is two percent, and the firm is expected to continue forever. If current profits are $1,000, what is the value of the firm?
Correct answer(s):
- $35,000
A firm will have constant profits of $100,000 per year for the next four years and the interest rate is six percent. Assuming these profits are realized at the end of each year, what is the present value these future profits?
Correct answer(s):
- $400,000
A farm must decide whether or not to purchase a new tractor. The tractor will reduce costs by $2,000 in the first year, $2,500 in the second and $3,000 in the third and final year of usefulness. The tractor costs $9,000 today, while the above cost savings will be realized at the end of each year. If the interest rate is seven percent, what is the net present value of purchasing the tractor?
Correct answer(s):
- None of the statements associated with this question are correct
When dealing with present value, a higher interest rate:
Correct answer(s):
- Decreases the present value of a future amount
If the interest rate is five percent, the present value of $200 received at the end of five years is:
Correct answer(s):
- $156.71
If you put $1,000 in a savings account at an interest rate of 10%, how much money will you have in one year?
Correct answer(s):
- $1,100
If the interest rate is 5%, what is the present value of ten dollars received one year from now?
Correct answer(s):
- $9.52