Property owners move scarce resources towards the production of goods most valued by society because
  • Consumers demand inexpensive goods and services
If the interest rate is 5% and cash flows are $3,000 at the end of year one and $5,000 at the end of year two, then the present value of these cash flows is
  • $7,392.29
“Our marginal revenue is greater than our marginal cost at the current production level.” This statement indicates that the firm
  • Should increase the quantity produced to increase profits
Generally when calculating profits as total revenue minus total costs, accounting profits are larger than economic profits because economists take into account
  • Both explicit and implicit costs
Marginal benefit refers to:
  • The additional benefits that arise by using an additional unit of the managerial control variables
Maximizing the present value of all future profits is the same as maximizing current profits if the growth rate in profits is:
  • Less than the interest rate
Suppose the growth rate of the firm’s profit is 5%, the interest rate is 6%, and the current profits of the firm are 100 million dollars. What is the value of the firm?
  • $10,600 million
. Suppose the growth rate of the firm’s profit is 5%, the interest rate is 6%, and the current profits of the firm are 80 million dollars: What is the value of the firm?
  • $8,480 million
Which is the correct statement about the relationship between government and the market?
  • Government often plays a role in disciplining the market process
Trade will take place:
  • If the maximum that a consumer is willing and able to pay is greater than the minimum price the producer is willing and able to accept for a good
Which of the following is not the source of rivalry that exists in economic transactions?
  • Government-producer rivalry
Incentive plans imply:
  • If managers put forth little effort, they receive little pay; if they put forth much effort and hence generate many sales, they receive a lot of pay