An electricity company is considering damming a small river to generate electricity at a cost of $160,000 and a profit of $200,000 in 5 years. The current market rate is 5 percent. Should the company make the investment?
A. Yes, the future value of the profit is greater than the present value of the cost
B. No, the future value of the profit is less than the present value of the cost
C. Yes, the present value of the profit is greater than the present value of the cost
D. No, the present value of the profit is less than the present value of the cost
D. No, the present value of the profit is less than the present value of the cost
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Which of the following changes is/are a shifter of the demand for a particular food product?
A. Changes in consumer income. B. Changes in consumer perceptions of that product. C. Changes in price of that product. D. Both A and B.
Refer to Figure 4-6. At the price P2, consumers are willing to buy the Q2 pounds of granola. Is this an economically efficient quantity?
A) Yes, otherwise consumers would not buy Q2 units. B) Yes, because the price P2 shows what consumers are willing to pay for the product. C) No, the marginal benefit of the last unit (Q2 ) exceeds the marginal cost of that last unit. D) No, the marginal cost of the last unit (Q2 ) exceeds the marginal benefit of the last unit.