When prices of products are set below equilibrium,
a. society's resources are inefficiently allocated.
b. firms expand output to increase profits.
c. firms earn excessively high profits.
d. consumers benefit from surpluses of cheap goods.
a
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A new computer will generate $1,000 in net revenue for a firm during its first year, $500 during its second year, $250 during its third year, and nothing thereafter. If the interest rate is 10 percent (0.10) per year, what is the present value of the computer to the firm? (The first payment will be received at the end of this year.)
a. $1,590.91 b. $1,510.14 c. $1,750.00 d. $1,446.28 e. $1,661.16
Economists who focus on the need for fiscal austerity tend to focus on
A. the short run. B. the long run. C. both the short run and the long run. D. neither the short run or the long run.