Maryann and Don want to open their own deli. To do so, Maryann must give up her job, at which she earns $20,000 per year, and Don must give up his part-time job, at which he earns $10,000 per year. They must liquidate their money market fund, which earns $1,000 interest annually. The rent on the building is $10,000 per year, and expenses for such necessities as utilities, corned beef, and pickles
are $35,000 annually. What minimum amount of revenue per year would make it worthwhile, financially, for Maryann and Don to operate the deli?
a. $10,000
b. $35,000
c. $45,000
d. $31,000
e. $76,000
E
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According to the text there appear to be very limited opportunities for input substitution in the production of pipe organs. Which of the following is the most plausible explanation for this observation?
A) Capital costs have made it too expensive to purchase more capital stock. B) It requires a large amount of highly trained labor to produce a single pipe organ. C) The marginal productivity of additional trained workers is zero. D) The capital used in producing pipe organs is much more expensive than the labor inputs.
The current value of a business firm is the present value of all its future profits
Indicate whether the statement is true or false