James used $250,000 from his savings account that paid an annual interest of 15% to purchase a hardware store. After one year, James sold the business for $320,000 . What is his economic profit?

Your aunt gives you a PepsiCo bond with face value of $5,000 . It will mature in two years. Currently, the interest rate is 10 percent (0.10) per year. How will the value of the bond change if the interest rate falls to 5 percent tomorrow morning?

a. It will rise by $413.22. b. It will rise by $402.90. c. It will rise by $432.90. d. It will fall by $432.90. e. It will fall by $402.92.

George and Brad are waiters at a local restaurant. The female customers prefer to be seated at the tables that George waits on because they think George is better looking than Brad. If George earns more than Brad because of his better looks, this is an example of

a. effort playing a key role in wage differences. b. differences in human capital. c. a beauty premium. d. a compensating differential.